UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1999
OR
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number 1-12928
Agree Realty Corporation
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(Exact name of registrant as specified in its charter)
Maryland 38-3148187
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
31850 Northwestern Highway, Farmington Hills, Michigan 48334
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, included area code: (248) 737-4190
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes No
|X| |_|
4,364,867 Shares of Common Stock, $.0001 par value, were outstanding as of
August 2, 1999
Agree Realty Corporation
Form 10-Q
Index
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Part I: Financial Information Page
Item 1. Interim Consolidated Financial Statements 3
Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998 4-5
Consolidated Statements of Operations for the
six months ended June 30, 1999 and 1998 6
Consolidated Statements of Operations for the
three months ended June 30, 1999 and 1998 7
Consolidated Statement of Stockholders' Equity
for the six months ended June 30, 1999 8
Consolidated Statements of Cash Flows for the
six months ended June 30, 1999 and 1998 9
Notes to Consolidated Financial Statements 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-19
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 20
Part II: Other Information
Item 1. Legal Proceedings 21
Item 2. Changes in Securities 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 5 Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
Signatures 23
2
Agree Realty Corporation
Part I: Financial Information
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ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------
3
<TABLE>
<CAPTION>
Agree Realty Corporation
Consolidated Balance Sheets (Unaudited)
- -----------------------------------------------------------------------------
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Assets
Real Estate Investments
Land $ 39,945,162 $ 37,005,162
Buildings 131,886,962 128,861,505
Property under development 844,237 1,054,335
------------- -------------
172,676,361 166,921,002
Less accumulated depreciation (24,675,513) (23,022,291)
------------- -------------
Net Real Estate Investments 148,000,848 143,898,711
Cash and Cash Equivalents 13,721 994,159
Accounts Receivable - Tenants 217,451 645,052
Investments In and Advances To Unconsolidated Entities 789,244 1,135,409
Unamortized Deferred Expenses
Financing 1,733,593 1,533,440
Leasing costs 287,323 302,694
Other Assets 807,928 761,066
------------- -------------
$ 151,850,108 $ 149,270,531
============= =============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
4
<TABLE>
<CAPTION>
Agree Realty Corporation
Consolidated Balance Sheets (Unaudited)
- -----------------------------------------------------------------------------
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Liabilities and Stockholders' Equity
Mortgage Payable $ 53,530,848 $ 41,299,294
Construction Loans 12,702,599 8,874,326
Notes Payable 23,658,232 35,158,232
Dividends and Distributions Payable 2,317,670 2,309,136
Accrued Interest Payable 299,230 318,362
Accounts Payable
Operating 503,238 721,485
Capital expenditures 348,631 1,444,517
Tenant Deposits 46,273 48,606
------------- -------------
Total Liabilities 93,406,721 90,173,958
------------- -------------
Minority Interest 5,945,454 6,047,843
------------- -------------
Stockholders' Equity
Common stock, $.0001 par value; 20,000,000 shares authorized,
4,364,867 and 4,346,313 shares issued and outstanding 436 435
Additional paid-in capital 63,217,235 62,873,987
Deficit (10,111,947) (9,448,351)
------------- -------------
53,105,724 53,426,071
Less: unearned compensation - restricted stock (607,791) (377,341)
------------- -------------
Total Stockholders' Equity 52,497,933 53,048,730
------------- -------------
$ 151,850,108 $ 149,270,531
============= =============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
5
<TABLE>
<CAPTION>
Agree Realty Corporation
Consolidated Statements of Income (Unaudited)
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Six Months Ended Six Months Ended
June 30, 1999 June 30, 1998
---------------- ----------------
<S> <C> <C>
Revenues
Rental income $ 9,514,741 $ 8,347,856
Operating cost reimbursements 1,222,747 1,040,904
Management fees and other 18,960 47,062
--------- ---------
Total Revenues 10,756,448 9,435,822
---------- ---------
Operating Expenses
Real estate taxes 843,782 723,847
Property operating expenses 662,393 524,611
Land lease payments 273,830 271,364
General and administrative 670,813 547,379
Depreciation and amortization 1,710,829 1,465,946
--------- ---------
Total Operating Expenses 4,161,647 3,533,147
--------- ---------
Income From Operations 6,594,801 5,902,675
--------- ---------
Other Income (Expense)
Interest expense, net (2,780,187) (2,438,725)
Development fee income 40,873 59,031
Equity in net income (loss) of
unconsolidated entities 13,869 (4,641)
--------- ---------
Total Other Expense (2,725,445) (2,384,335)
--------- ---------
Income Before Minority Interest 3,869,356 3,518,340
Minority Interest (517,274) (450,077)
--------- ---------
Net Income $ 3,352,082 $ 3,068,263
========= =========
Earnings Per Share $ .77 $ .71
========= =========
Weighted Average Number of
Common Shares Outstanding 4,364,867 4,346,313
========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
6
<TABLE>
<CAPTION>
Agree Realty Corporation
Consolidated Statements of Income (Unaudited)
- -----------------------------------------------------------------------------
Three Months Ended Three Months Ended
June 30, 1999 June 30, 1998
------------------ ------------------
<S> <C> <C>
Revenues
Rental income $ 4,798,318 $ 4,177,315
Operating cost reimbursements 566,215 515,982
Management fees and other 9,697 22,805
----------- -----------
Total Revenues 5,374,230 4,716,102
----------- -----------
Operating Expenses
Real estate taxes 421,370 363,222
Property operating expenses 216,090 249,642
Land lease payments 136,915 129,443
General and administrative 354,768 269,383
Depreciation and amortization 861,933 739,240
----------- -----------
Total Operating Expenses 1,991,076 1,750,930
----------- -----------
Income From Operations 3,383,154 2,965,172
----------- -----------
Other Income (Expense)
Interest expense, net (1,393,502) (1,198,668)
Development fee income 40,873 --
Equity in net income (loss) of
unconsolidated entities 6,935 (1,642)
----------- -----------
Total Other Expense (1,345,694) (1,200,310)
----------- -----------
Income Before Minority Interest 2,037,460 1,764,862
Minority Interest (272,377) (223,693)
----------- -----------
Net Income $ 1,765,083 $ 1,541,169
=========== ===========
Earnings Per Share $ .40 $ .36
=========== ===========
Weighted Average Number of
Common Shares Outstanding 4,364,867 4,346,313
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
7
<TABLE>
<CAPTION>
Agree Realty Corporation
Consolidated Statement of Stockholders' Equity (Unaudited)
- -----------------------------------------------------------------------------
Unearned
Common Stock Additional Compensation -
------------------ Paid-In Restricted
Shares Amount Capital Deficit Stock
------ ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1999 4,346,313 $ 435 $62,873,987 $(9,448,351) $(377,341)
Issuance of shares under
Stock Incentive Plan 18,554 1 343,248 -- (327,450)
Vesting of restricted stock -- -- -- --
97,000
Dividends declared for the period
January 1, 1999 to June 30, 1999 -- -- -- (4,015,678) --
Net income for the period
January 1, 1999 to June 30, 1999 -- -- -- 3,352,082 --
========= ======= =========== ============ =========
Balance, June 30, 1999 4,364,867 $ 436 $63,217,235 $(10,111,947) $(607,791)
========= ======= =========== ============ =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
8
<TABLE>
<CAPTION>
Agree Realty Corporation
Consolidated Statements of Cash Flows (Unaudited)
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Six Months Ended Six Months Ended
June 30, 1999 June 30, 1998
---------------- ----------------
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 3,352,082 $ 3,068,263
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 1,668,214 1,423,037
Amortization 320,615 337,886
Equity in net (income) loss of unconsolidated entities (13,869) 4,641
Minority interests 517,274 450,077
Decrease (increase) in accounts receivable 427,601 (401)
Increase in other assets (65,476) (117,484)
Decrease in accounts payable (218,247) (142,713)
Increase (decrease) in accrued interest (19,132) 12,607
Increase (decrease) in tenant deposits (2,333) 1,667
----------- ---------
Net Cash Provided By Operating Activities 5,966,729 5,037,580
----------- ---------
Cash Flows From Investing Activities
Acquisition of real estate investments (including
capitalized interest of $270,000 in 1999
and $210,671 in 1998) (5,755,359) (7,240,378)
Investments in and advances to unconsolidated entities 354,412 463,700
----------- ---------
Net Cash Used In Investing Activities (5,400,947) (6,776,678)
----------- ---------
Cash Flows From Financing Activities
Mortgage proceeds 12,390,135 --
Line-of-credit net borrowings (payments) (11,500,000) 4,232,928
Dividends and limited partners' distributions paid (4,626,807) (4,577,558)
Construction loan proceeds 3,828,273 2,145,822
Net increase in (repayment of) capital expenditure payables (1,080,087) (555,890)
Payment for financing costs (381,153) (8,000)
Payments of mortgages payable (158,581) (178,981)
Payment of leasing costs (18,000) (28,635)
Redemption of restricted stock -- (35,328)
----------- ---------
Net Cash Provided By (Used In) Financing Activities (1,546,220) 994,358
----------- ---------
Net Decrease In Cash and Cash Equivalents (980,438) (744,740)
Cash and Cash Equivalents, beginning of period 994,159 1,785,968
----------- ---------
Cash and Cash Equivalents, end of period $ 13,721 $ 1,041,228
=========== =========
Supplemental Disclosure of Cash flow Information
Cash paid for interest (net of amounts capitalized) $ 2,625,406 $ 2,243,230
=========== =========
Supplemental Disclosure of Non-Cash Transactions
Dividends and limited partners' distributions declared
and unpaid $ 2,317,670 $ 2,292,765
Shares issued under Stock Incentive Plan $ 343,249 $ 405,830
=========== =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
9
Agree Realty Corporation
Notes to Consolidated Financial Statements
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1. Basis of The accompanying unaudited 1999 consolidated financial
Presentation statements have been prepared in accordance with
generally accepted accounting principles for interim
financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the
information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. The consolidated balance sheet at December
31, 1998 has been derived from the audited
consolidated financial statements at that date.
Operating results for the six months ended June 30,
1999 are not necessarily indicative of the results
that may be expected for the year ending December 31,
1999, or for any other interim period. For further
information, refer to the consolidated financial
statements and footnotes thereto included in the
Company's Annual Report for the year ended December
31, 1998.
2. Earnings Per Earnings per share has been computed by dividing the
share income by the Share weighted average number of common
shares outstanding. The amounts reflected in the
consolidated statements of income are presented in
accordance with Statement of Financial Accounting
Standards (SFAS) No. 128 "Earnings per Share"; the
amounts of the Company's "basic" and "diluted"
earnings per share (as defined in SFAS No. 128) are
the same.
3. Reclassifications Certain reclassifications were made to prior years'
financial statements to conform with the current
years' presentation.
10
Agree Realty Corporation
Part I
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OEPRATIONS
Overview
The Company was established to continue to operate and expand the retail
property business of its Predecessors. The Company commenced its
operations on April 22, 1994 with the sale of 2,500,000 shares of common
stock in an initial public offering. The net cash proceeds to the Company
from the completion of this offering were approximately $45.4 million,
which were used primarily to reduce outstanding indebtedness, pay stock
issuance costs and establish a working capital reserve. On May 21, 1997,
the Company completed an offering of 1,625,000 shares of common stock at
$20.625 per share; on June 18, 1997 the underwriters exercised their
overallotment option for an additional 28,850 shares at the same per share
price (collectively, "the 1997 Offering"). The net proceeds from the 1997
Offering of approximately $31.9 million were used to repay amounts
outstanding under the Company's Credit Facility.
The assets of the Company are held by, and all operations are conducted
through, Agree Limited Partnership (the "Operating Partnership"), of which
the Company is the sole general partner and held an 86.63% interest as of
June 30, 1999. The Company is operating so as to qualify as a real estate
investment trust ("REIT") for federal income tax purposes.
The following should be read in conjunction with the Consolidated
Financial Statements of Agree Realty Corporation, including the respective
notes thereto, which are included in this Form 10-Q.
Comparison of Six Months Ended June 30, 1999 to Six Months Ended June 30,
1998
Rental income increased $1,167,000, or 14%, to $9,515,000 in 1999,
compared to $8,348,000 in 1998. The increase was the result of the
development and acquisition of five properties in 1998 and one property in
1999.
Operating cost reimbursements, which represent additional rent required by
substantially all of the Company's leases to cover the tenants'
proportionate share of real estate taxes and property operating expenses,
increased $182,000, or 17%, to $1,223,000 in 1999, compared to $1,041,000
in 1998. Operating cost reimbursements increased due to the increase in
real estate taxes and property operating expenses from 1998 to 1999, as
explained below.
Management fees and other income decreased $28,000, or 60%, to $19,000 in
1999, compared to $47,000 in 1998. The decrease was the result of a
reduction in management fees resulting from the Company's acquisition of a
property it previously managed.
11
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Real estate taxes increased $120,000, or 17%, to $844,000 in 1999 compared to
$724,000 in 1998. The increase is the result of the addition of new
properties.
Property operating expenses (shopping center maintenance, insurance and
utilities) increased $137,000, or 26%, to $662,000 in 1999 compared to
$525,000 in 1998. The increase was the result of increased snow removal costs
of $121,000 and an increase in shopping center maintenance costs of $16,000
in 1999 versus 1998.
Land lease payments remained relatively constant at $274,000 in 1999 compared
to $271,000 in 1998.
General and administrative expenses increased $124,000, or 23%, to $671,000
in 1999 compared to $547,000 in 1998. The increase was primarily the result
of an increase in compensation-related expenses and state and local taxes.
General and administrative expenses as a percentage of rental income
increased from 6.6% for 1998 to 7.1% in 1999.
Depreciation and amortization increased $245,000, or 17%, to $1,711,000 in
1999 compared to $1,466,000 in 1998. The increase was the result of the
development and acquisition of five properties in 1998 and one property in
1999.
Interest expense increased $341,000, or 14%, to $2,780,000 in 1999, from
$2,439,000 in 1998. The increase in interest expense was the result of the
Company's additional borrowing to finance its continued acquisition and
development of properties.
Development fee income decreased $18,000 or 31% to $41,000 in 1999, from
$59,000 in 1998. This amount was not included in the Company's calculation of
Funds from Operations due to the non-recurring nature of this type of income.
Equity in net income (loss) of unconsolidated entities increased $19,000 to
$14,000 in 1999 compared to ($5,000) in 1998 as a result of decreased
depreciation expense in 1999 related to certain of the Joint Venture
Properties in which the Company holds interests ranging from 8% to 20%.
The Company's income before minority interest increased $351,000 as a result
of the foregoing factors.
Comparison of Three Months Ended June 30, 1999 to Three Months Ended June 30,
1998
Rental income increased $621,000, or 15%, to $4,798,000 in 1999, compared to
$4,177,000 in 1998. The increase was the result of the development and
acquisition of five properties in 1998 and one property in 1999.
Operating cost reimbursements increased $50,000, or 10%, to $566,000 in 1999,
compared to $516,000 in 1998. Operating cost reimbursements increased due
primarily to the increase in real estate taxes from 1998 to 1999, as
explained below.
Management fees and other income decreased $13,000, or 57%, to $10,000 in
1999, compared to $23,000 in 1998. The decrease was the result of a reduction
in management fees resulting from the Company's acquisition of a property it
previously managed.
12
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Real estate taxes increased $58,000, or 16%, to $421,000 in 1999 compared to
$363,000 in 1998. The increase is the result of the addition of new
properties.
Property operating expenses (shopping center maintenance, insurance and
utilities) decreased $34,000, or 13%, to $250,000 in 1999 compared $216,000
in 1998. The decrease was the result of decreased snow removal costs of
$7,000 and a decrease in shopping center maintenance costs of $27,000 in 1999
versus 1998.
Land lease payments remained relatively constant at $137,000 in 1999 compared
to $129,000 in 1998.
General and administrative expenses increased $86,000, or 32%, to $355,000 in
1999 compared to $269,000 in 1998. The increase was primarily the result of
an increase in compensation-related expenses and state and local taxes.
General and administrative expenses as a percentage of rental income
increased from 6.5% for 1998 to 7.4% in 1999.
Depreciation and amortization increased $123,000, or 17%, to $862,000 in 1999
compared to $739,000 in 1998. The increase was the result of the development
and acquisition of five properties in 1998 and one property in 1999.
Interest expense increased $195,000, or 16%, to $1,394,000 in 1999, from
$1,199,000 in 1998. The increase in interest expense was the result of the
Company's additional borrowing to finance its continued acquisition and
development of properties.
The Company received development fee income of $41,000 in 1999. This amount
was not included in the Company's calculation of Funds from Operations, due
to the non-recurring nature of this type of income. There was no development
fee income in 1998.
Equity in net income (loss) of unconsolidated entities increased $9,000 to
$7,000 in 1999 compared to ($2,000) in 1998 as a result of decreased
depreciation expense in 1999 related to certain of the Joint Venture
Properties in which the Company holds interests ranging from 8% to 20%.
The Company's income before minority interest increased $273,000 as a result
of the foregoing factors.
13
Agree Realty Corporation
Part I
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Funds from Operations
Management considers Funds from Operations ("FFO") to be a supplemental
measure of the Company's operating performance. FFO is defined by the
National Association of Real Estate Investments Trusts, Inc. ("NAREIT") to
mean net income computed in accordance with generally accepted accounting
principles ("GAAP"), excluding gains (or losses) from debt restructuring
and sales of property, plus real estate related depreciation and
amortization, and after adjustments for unconsolidated entities in which
the REIT holds an interest. FFO does not represent cash generated from
operating activities in accordance with GAAP and is not necessarily
indicative of cash available to fund cash needs. FFO should not be
considered as an alternative to net income as the primary indicator of the
Company's operating performance or as an alternative to cash flow as a
measure of liquidity.
14
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
The following table illustrates the calculation of FFO for the six months
and three months ended June 30, 1999 and 1998:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1999 1998
---------- -----------
<S> <C> <C>
Net income before minority interest $3,869,356 $ 3,518,340
Depreciation of real estate assets 1,668,088 1,418,884
Amortization of leasing costs 33,371 37,285
Amortization of stock awards 97,000 78,000
Depreciation of real estate assets held in 333,290 350,440
unconsolidated entities
Development fee income (40,873) (59,031)
---------- -----------
Funds from Operations $5,960,232 $ 5,343,918
========== ===========
Weighted Average Shares and OP Units Outstanding 5,038,414 4,984,272
========== ===========
</TABLE>
FFO increased $616,000, or 12%, to $5,960,000. The increase in FFO is
primarily the result of the acquisition and development of five properties
in 1998 and one property in 1999.
<TABLE>
<CAPTION>
Three Months Ended June 30, 1999 1998
---------- -----------
<S> <C> <C>
Net income before minority interest $2,037,460 $ 1,764,862
Depreciation of real estate assets 840,563 715,350
Amortization of leasing costs 16,685 20,105
Amortization of stock awards 48,500 39,000
Depreciation of real estate assets held in 166,645 175,221
unconsolidated entities
Development fee income (40,873) --
---------- -----------
Funds from Operations $3,068,980 $ 2,714,538
========== ===========
Weighted Average Shares and OP Units Outstanding 5,038,414 4,984,272
========== ===========
</TABLE>
FFO increased $354,000 or 13%, to $3,069,000. The increase in FFO is
primarily the result of the acquisition and development of five properties
in 1998 and one property in 1999.
15
Agree Realty Corporation
Part I
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Forward-Looking Statements
Management has included herein certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended. When
used, statements which are not historical in nature including the words
"anticipate," "estimate," "should," "expect," "believe," "intend" and
similar expressions are intended to identify forward-looking statements.
Such statements are, by their nature, subject to certain risks and
uncertainties. Risks and other factors that might cause such a difference
include, but are not limited to, the effect of economic and market
conditions; risks that the Company's acquisition and development projects
will fail to perform as expected; financing risks, such as the inability
to obtain debt or equity financing on favorable terms; the level and
volatility of interest rates; loss or bankruptcy of one or more of the
Company's major retail tenants; and failure of the Company's properties to
generate additional income to offset increases in operating expenses.
Liquidity and Capital Resources
The Company's principal demands for liquidity are distributions to its
stockholders, debt repayment, development of new properties and future
property acquisitions.
During the quarter ended June 30, 1999, the Company declared a quarterly
dividend of $.46 per share. The dividend was paid on July 15, 1999 to
holders of record on June 30, 1999.
During the quarter ended June 30, 1999, the Company completed the
following transactions with regard to its financing and development
activities:
o On April 1, 1999, the Company obtained replacement financing for a
mortgage on its Lakeland, Florida property. The mortgage is in the
amount of $7,700,000, bears interest at 7.00% and has a term of
fourteen years, with a rate review at the end of the seventh year. The
note requires monthly principal and interest payments in the amount of
$61,948, based on an amortization period of 18.5 years.
o On April 30, 1999, the Company, through a wholly-owned subsidiary,
obtained a construction loan on a property it is developing in
Columbia, Maryland. The construction loan is in the amount of
$4,456,955, bears interest at a weighted average interest rate based
on LIBOR and matures on October 16, 2002. The note requires interest
only payments during the term of the loan.
o On June 11, 1999, the Company, through a wholly owned subsidiary,
obtained a construction loan on a property it is developing in
Germantown, Maryland. The construction loan is in the amount of
$4,138,248, bears interest at a weighted average interest rate based
on LIBOR and matures on October 16, 2002. The note requires interest
only payments during the term of the loan.
16
Agree Realty Corporation
Part I
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o On June 27, 1999, the Company, through a wholly-owned subsidiary,
obtained a trust mortgage secured by four properties the Company had
previously developed. The mortgage is in the amount of $12,390,135,
bears interest at 6.63%, and matures on February 5, 2017. The note
requires monthly principal and interest payments in the amount of
$99,598 based on an amortization period of 17.67 years.
As of June 30, 1999, the Company had total mortgage indebtedness of
$53,530,848 with a weighted average interest rate of 6.91%. Future
scheduled annual maturities of mortgages payable for the years ending June
30 are as follows: 2000 - $1,222,896; 2001 - $1,361,477; 2002 -
$1,458,286; 2003 - $1,561,984; 2004 - $1,673,060. This mortgage debt is
all fixed rate debt.
In addition, the Operating Partnership has in place a $50 million line of
Credit Facility (the "Credit Facility") which is guaranteed by the
Company. The loan matures in August 2000 and can be extended by the
Company for an additional three years. Advances under the Credit Facility
bear interest within a range of one-month to six-month LIBOR plus 150
basis points to 213 basis points or the bank's prime rate less 50 basis
points to plus 13 basis points, at the option of the Company, based on
certain factors such as debt to property value and debt service coverage.
The Credit Facility is used to fund property acquisitions and development
activities and is secured by most of the Company's Properties which are
not otherwise encumbered and properties to be acquired or developed. As of
June 30, 1999, $23,158,232 was outstanding under the Credit Facility.
The Company also has in place a $5 million line of credit (the "Line of
Credit"), which matures October 19, 1999, and which the Company expects to
renew for an additional 12-month period. The Line of Credit bears interest
at the bank's prime rate less 50 basis points or 175 basis points in
excess of the one-month LIBOR rate, at the option of the Company. The
purpose of the Line of Credit is to provide working capital to the Company
and fund land options and start-up costs associated with new projects. As
of June 30, 1999, $500,000 was outstanding under the Line of Credit.
The Company's wholly-owned subsidiaries have obtained construction
financing of approximately $15,600,000 to fund the development of four
retail properties. The notes require quarterly interest payments, based on
a weighted average interest rate based on LIBOR, computed by the lender.
The notes mature on October 16, 2002 and are secured by the underlying
land and buildings. As of June 30, 1999, $10,972,109 was outstanding under
these notes.
The Company has received funding from an unaffiliated third party for the
construction of certain of its Properties. Advances under this agreement
bear no interest and are required to be repaid within sixty (60) days
after the date construction has been completed. The advances are secured
by the specific land and buildings being developed. As of June 30, 1999,
$1,730,490 was outstanding under this arrangement.
17
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
The Company has three development projects under construction that will
add an additional 68,000 square feet of retail space to the Company's
portfolio. These projects are expected to be completed during the fourth
quarter of 1999. Additional Company funding required for these projects is
estimated to be $6,500,000 and will come from the Credit Facility and
construction loans. Management expects the development of these projects
to have a positive effect on cash generated by operating activities and
Funds from Operations.
The Company intends to meet its short-term liquidity requirements,
including capital expenditures related to the leasing and improvement of
the Properties, through its cash flow provided by operations and the Line
of Credit. Management believes that adequate cash flow will be available
to fund the Company's operations and pay dividends in accordance with REIT
requirements. The Company may obtain additional funds for future
development or acquisitions through other borrowings or the issuance of
additional shares of capital stock. The Company intends to incur
additional debt in a manner consistent with its policy of maintaining a
ratio of total debt (including construction and acquisition financing) to
total market capitalization of 65% or less.
The Company plans to begin construction of additional pre-leased
developments and may acquire additional properties, which will initially
be financed by the Credit Facility and Line of Credit. Management intends
to periodically refinance short-term construction and acquisition
financing with long-term debt and/or equity. Upon completion of
refinancing, the Company intends to lower the ratio of total debt to
market capitalization to 50% or less. Nevertheless, the Company may
operate with debt levels or ratios which are in excess of 50% for extended
periods of time prior to such refinancing.
Year 2000 Compliance
The Company's information system consists of a three station Windows NT
network system. All accounting and property management functions are
processed via Timberline Software, a nationally recognized provider of
software to the real estate industry. The Company is currently assessing
its significant business relationships with external parties, including
its major tenants, to determine if their failure to be Year 2000 compliant
would have a material adverse effect upon the Company. In the event that
any of the Company's significant tenants, vendors, banks or others with
whom it does business do not successfully and timely achieve Year 2000
compliance, the Company's operations may be affected. To date, nothing has
come to the attention of management that leads it to conclude that the
likelihood of such adverse effect reasonably exists. However, because the
complexities involved, management cannot provide assurance that the Year
2000 issue will not have an impact on the Company's operations.
The Company has completed a review of its information systems and believes
its business technologies are fully compliant with any issues that may
arise as a result of Year 2000 issues.
18
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Inflation
The Company's leases generally contain provisions designed to mitigate the
adverse impact of inflation on net income. These provisions include
clauses enabling the Company to pass through to tenants certain operating
costs, including real estate taxes, common area maintenance, utilities and
insurance, thereby reducing the Company's exposure to increases in costs
and operating expenses resulting from inflation. Certain of the Company's
leases contain clauses enabling the Company to receive percentage rents
based on tenants' gross sales, which generally increase as prices rise,
and, in certain cases, escalation clauses, which generally increase rental
rates during the terms of the leases. In addition, expiring tenant leases
permit the Company to seek increased rents upon release at market rates if
rents are below the then existing market rates.
19
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to interest rate risk primarily through its
borrowing activities. There is inherent rollover risk for borrowings as
they mature and are renewed at current market rates. The extent of this
risk is not quantifiable or predictable because of the variability of
future interest rates and the Company's future financing requirements.
Mortgages payable - As of June 30, 1999 the Company had three mortgages
outstanding. The first mortgage in the amount of $33,492,105 bears
interest at 7.00%. The mortgage matures on November 15, 2005. The second
mortgage in the amount of $7,648,608 bears interest at 7.00%. The mortgage
matures on April 1, 2013 and is subject to a rate review after the 7th
year (April 1, 2006). The third mortgage in the amount of $12,390,135
bears interest at 6.63%. The mortgage matures on February 5, 2017.
Construction loans - As of June 30, 1999 the Company had Construction
loans outstanding of $12,702,599. Under the terms of the construction
loans the Company bears no interest rate risk.
Notes Payable - As of June 30, 1999 the Company had $23,658,232
outstanding on its Line-of Credit which was subject to interest at a
variable interest rate based on LIBOR.
The Company does not enter into financial instrument transactions for
trading or other speculative purposes or to manage interest rate exposure.
A 10% adverse change in interest rates on the portion of the Company's
debt bearing interest at variable rates would result in an annual increase
in interest expense of approximately $161,000.
20
Agree Realty Corporation
Part I
- -----------------------------------------------------------------------------
Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On May 10, 1999, the Company held its Annual Meeting of
Stockholders. The following were the results of the meeting:
The stockholders elected Richard Agree and Michael Rotchford as
Directors until the annual meeting of stockholders in 2002 or
until a successor is elected and qualified.
The vote was as follows:
Richard Agree
Votes cast for 4,191,524
Votes withheld 36,749
Not voting 136,594
Michael Rotchford
Votes cast for 4,188,169
Votes withheld 40,104
Not voting 136,594
21
Agree Realty Corporation
Part II
- -----------------------------------------------------------------------------
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation and Articles of Amendment
of the Company (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement on Form
S-11 (Registration Statement No. 33-73858, as amended
("Agree S-11"))
3.2 Bylaws of the Company (incorporated by reference to
Exhibit 3.3 to Agree S-11)
10.1 Assumption Agreement, Mortgage Modification and
Amended and Restated Mortgage and Security Agreement,
dated as of March 31, 1999 by Agree Limited
Partnership to and in favor of Nationwide Life
Insurance Company
10.2 Project Loan Agreement dated as of April 30, 1999
between Wilmington Trust Company not in its
individual capacity, but solely as Owner Trustee and
Agree - Columbia Crossing Project L.L.C.
10.3 Project Loan Agreement dated as of June 11, 1999
between Wilmington Trust Company not in its
individual capacity, but solely as Owner Trustee and
Agree - Milestone Center Project L.L.C.
10.4 Trust Mortgage dated as of June 27, 1999 From Agree
Facility No. 1, L.L.C. as Grantor to Manufacturers
and Traders Trust Company
10.5 Employment Agreement, dated July 1, 1999, by and
between the Company and Richard Agree
10.6 Employment Agreement dated July 1, 1999, by and between
the Company and Kenneth R. Howe
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
22
Agree Realty Corporation
Signatures
- -----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has fully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Agree Realty Corporation
/s/ RICHARD AGREE
- ---------------------------------------
Richard Agree
President and Chief Executive Officer
/s/ KENNETH R. HOWE
- ---------------------------------------
Kenneth R. Howe
Vice-President - Finance and Secretary
(Principal Financial Officer)
Date: August 2, 1999
- ---------------------------------------
23
Prepared by and return to: #99052280
Julian E. Whitehurst, Esquire OR BK 04215 PG 0238
Lowndes, Drosdick, Doster, RECORDED 04/22/99 03:26 PM
Kantor & Reed, P.A. RICHARD M. WEISS CLERK OF COURT
Post Office Box 2809 POLK COUNTY
Orlando, Florida 32802-2809 DOC TAX PD (F.S.201.08) 26,950.00
DEPUTY CLERK K SEARS
Annis Mitchell Law Firm
201 N. Franlkin St. Ste 2100 Borrower Name: Agree Limited Partnership
Tampa, FL 33602 Project Name: North Lakeland Plaza
THIS ASSUMPTION AGREEMENT, MORTGAGE MODIFICATION AND AMENDED AND RESTATED
MORTGAGE AND SECURITY AGREEMENT CONSTITUTES AN ASSUMPTION OF, AMENDS AND
RESTATES THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT FROM NORTH LAKELAND
PLAZA, A MICHIGAN COPARTNERSHIP TO AND IN FAVOR OF MICHIGAN NATIONAL BANK OF
DETROIT, A NATIONAL BANKING ASSOCIATION, DATED APRIL 15, 1986, AS RECORDED
APRIL 17, 1986 IN OFFICIAL RECORDS BOOK 2413, PAGE 945, AMONG THE PUBLIC
RECORDS OF POLK COUNTY, FLORIDA, AS SUPPLEMENTED BY THAT CERTAIN ADDITIONAL
MORTGAGE, FROM NORTH LAKELAND PLAZA, A MICHIGAN CO-PARTNERSHIP TO AND IN
FAVOR OF MICHIGAN NATIONAL BANK, DATED DECEMBER 17, 1987 AND RECORDED
DECEMBER 18, 1987 IN OFFICIAL RECORDS BOOK 2589, PAGE 1169, AMONG THE PUBLIC
RECORDS OF POLK COUNTY, FLORIDA, AS CONSOLIDATED, MODIFIED AND EXTENDED BY
THAT CERTAIN CONSOLIDATION, MODIFICATION AND EXTENSION AGREEMENT DATED
DECEMBER 17, 1987 AND RECORDED DECEMBER 18, 1987 IN OFFICIAL RECORDS BOOK
2589, PAGE 1172 AND RERECORDED JANUARY 13, 1988 IN OFFICIAL RECORDS BOOK
2595, PAGE 2117, PUBLIC RECORDS OF POLK COUNTY, FLORIDA AS ASSIGNED BY THAT
CERTAIN ASSIGNMENT OF MORTGAGE AND LOAN DOCUMENTS FROM MICHIGAN NATIONAL
BANK, FORMERLY KNOWN AS MICHIGAN NATIONAL BANK OF DETROIT, A NATIONAL BANKING
ASSOCIATION TO AND IN FAVOR OF THE TRAVELERS INDEMNITY COMPANY, A CONNECTICUT
CORPORATION ("TRAVELERS"), DATED DECEMBER 15, 1987 AND RECORDED DECEMBER 18,
1987 IN OFFICIAL RECORDS BOOK 2589, PAGE 1203, AMONG THE PUBLIC RECORDS OF
POLK COUNTY, FLORIDA, AS COLLATERALLY ASSIGNED BY TRAVELERS TO SHAWMUT BANK
CONNECTICUT, NATIONAL ASSOCIATION ("SHAWMUT") BY THAT CERTAIN ASSIGNMENT OF
MORTGAGE AS COLLATERAL SECURITY DATED NOVEMBER 15, 1993 AND RECORDED MARCH 7,
1994 IN OFFICIAL RECORDS BOOK 3357, PAGE 610, PUBLIC RECORDS OF POLK COUNTY,
FLORIDA (WHICH ASSIGNMENT OF MORTGAGE AS COLLATERAL SECURITY WAS RELEASED BY
THAT CERTAIN RELEASE OF COLLATERAL ASSIGNMENTS BY SHAWMUT DATED MARCH 31,
1999 AND RECORDED IN THE PUBLIC RECORDS OF POLK COUNTY, FLORIDA), AS MODIFIED
BY THAT CERTAIN MORTGAGE MODIFICATION AGREEMENT FROM NORTH LAKELAND PLAZA, A
MICHIGAN CO- PARTNERSHIP TO AND IN FAVOR OF THE TRAVELERS INDEMNITY COMPANY,
A CONNECTICUT CORPORATION DATED MARCH 28, 1994, AS RECORDED ON APRIL 6, 1994,
IN OFFICIAL RECORDS BOOK 3371, PAGE 931, AMONG THE PUBLIC RECORDS OF POLK
COUNTY, FLORIDA, WHICH MODIFICATION WAS COLLATERALLY ASSIGNED BY TRAVELERS TO
SHAWMUT BY THAT CERTAIN ASSIGNMENT OF MORTGAGE MODIFICATION AGREEMENT AS
COLLATERAL SECURITY DATED JULY 20, 1994 AND RECORDED AUGUST 8, 1994 IN
OFFICIAL RECORDS BOOK 3423, PAGE 2123, AMONG THE PUBLIC RECORDS OF POLK
COUNTY, FLORIDA (WHICH ASSIGNMENT OF MORTGAGE MODIFICATION AGREEMENT AS
COLLATERAL SECURITY WAS RELEASED BY THAT CERTAIN RELEASE OF COLLATERAL
ASSIGNMENTS BY SHAWMUT DATED MARCH 31, 1999 AND RECORDED IN THE PUBLIC
RECORDS OF POLK COUNTY, FLORIDA), AS ASSIGNED AND ENDORSED TO LENDER BY THE
ASSIGNMENT OF NOTE AND MORTGAGE AGREEMENTS REFERRED TO HEREIN, AND SECURES
THE RENEWAL NOTE REFERRED TO HEREIN IN THE ORIGINAL PRINCIPAL AMOUNT OF SEVEN
MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS ($7,700,000.00) (THE
"NOTE"). THE NOTE AMENDS, RESTATES AND RENEWS (A) THAT CERTAIN REAL ESTATE
MORTGAGE NOTE FROM NORTH LAKELAND PLAZA, A MICHIGAN CO- PARTNERSHIP TO AND IN
FAVOR OF MICHIGAN NATIONAL BANK OF DETROIT, A NATIONAL BANKING ASSOCIATION,
DATED APRIL 15,1986, IN THE PRINCIPAL AMOUNT OF $9,000,000.00, AS
SUPPLEMENTED BY THAT CERTAIN ADDITIONAL NOTE FROM NORTH LAKELAND PLAZA, A
MICHIGAN CO-PARTNERSHIP TO AND IN FAVOR OF MICHIGAN NATIONAL BANK, A NATIONAL
BANKING ASSOCIATION, DATED DECEMBER 17, 1987, IN THE PRINCIPAL AMOUNT OF
$550,000.00, AS SUBSTITUTED BY THAT CERTAIN SUBSTITUTE AND CONSOLIDATION NOTE
FROM NORTH LAKELAND PLAZA, A MICHIGAN CO-PARTNERSHIP TO AND IN FAVOR OF
MICHIGAN NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, DATED DECEMBER 17,
1987, IN THE PRINCIPAL AMOUNT OF $9,550,000.00, AS AMENDED BY THAT CERTAIN
AMENDED AND RESTATED NOTE, FROM NORTH LAKELAND PLAZA, A MICHIGAN
CO-PARTNERSHIP TO AND IN FAVOR OF THE TRAVELERS INDEMNITY COMPANY, A
CONNECTICUT CORPORATION, DATED MARCH 28, 1994, IN THE PRINCIPAL AMOUNT OF
$8,325,000.00.
THE RENEWAL NOTE IS EXEMPT FROM FLORIDA INTANGIBLE TAXES
PURSUANT TO FLORIDA STATUTES SECTION 199.145.
ASSUMPTION AGREEMENT
MORTGAGE MODIFICATION AND AMENDED
AND RESTATED MORTGAGE AND
SECURITY AGREEMENT
THIS ASSUMPTION AGREEMENT MORTGAGE MODIFICATION AND
AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT is made,
executed and delivered as of this day of March 31st, 1999, by AGREE LIMITED
PARTNERSHIP, a Delaware limited partnership, whose address is 31850
Northwestern Highway, Farmington Hills, Michigan, 48334 (hereinafter referred
to as "Borrower"), to and in favor of NATIONWIDE LIFE INSURANCE COMPANY, an
Ohio corporation, having its principal office at One Nationwide Plaza,
Columbus, Ohio 43215-2220, Attention: Real Estate Investment Department, 34T,
or at such other place either within or without the State of Ohio as it may
from time to time designate, and any subsequent holder(s) hereof (hereinafter
referred to as "Lender");
THAT WHEREAS, Lender is the owner and holder of that certain
Mortgage and Security Agreement from North Lakeland Plaza, a Michigan
co-partnership to and in favor of Michigan National Bank of Detroit, a
national banking association, dated April 15, 1986, as recorded April 17,
1986 in Official Records Book 2413, Page 945, among the Public Records of
Polk County, Florida, as supplemented by that certain Additional Mortgage,
from North Lakeland Plaza, a Michigan co- partnership to and in favor of
Michigan National Bank, dated December 17, 1987 and recorded December 18,
1987 in Official Records Book 2589, Page 1169, among the Public Records of
Polk County, Florida, as consolidated, modified and extended by that certain
Consolidation, Modification and Extension Agreement dated December 17, 1987
and recorded December 18, 1987 in Official Records Book 2589, Page 1172 and
rerecorded January 13, 1988 in Official Records Book 2595, Page 2117, Public
Records of Polk County, Florida as assigned by that certain Assignment of
Mortgage and Loan Documents from Michigan National Bank, formerly known as
Michigan National Bank of Detroit, a national banking association to and in
favor of The Travelers Indemnity Company, a Connecticut corporation
("Travelers"), dated December 15, 1987 and recorded December 18, 1987 in
Official Records Book 2589, Page 1203, among the Public Records of Polk
County, Florida, as collaterally assigned by Travelers to Shawmut Bank
Connecticut, national association ("Shawmut") by that certain Assignment of
Mortgage as Collateral Security dated November 15, 1993 and recorded March 7,
1994 in Official Records Book 3357, Page 610, Public Records of Polk County,
Florida (which Assignment of Mortgage as Collateral Security was released by
that certain Release of Collateral Assignments by Shawmut dated March 31,
1999 and recorded immediately prior hereto in the Public Records of Polk
County, Florida), as modified by that certain Mortgage Modification Agreement
from North Lakeland Plaza, a Michigan co-partnership to and in favor of The
Travelers Indemnity Company, a Connecticut corporation dated March 28, 1994,
as recorded on April 6, 1994, in Official Records Book 3371, Page 931, among
the public records of Polk County, Florida, which modification was
collaterally assigned by Travelers to Shawmut by that certain Assignment of
Mortgage Modification Agreement as Collateral Security dated July 20, 1994
and recorded August 8, 1994 in Official Records Book 3423, Page 2123, among
the public records of Polk County, Florida (which Assignment of Mortgage
Modification Agreement as Collateral Security was released by that certain
Release of Collateral Assignments by Shawmut dated March 31, 1999 and
recorded immediately prior hereto in the Public Records of Polk County,
Florida) (hereinafter referred to as the "Original Mortgage"); and
WHEREAS, the Original Mortgage secures that certain that certain
Real Estate Mortgage Note from NLP, to and in favor of MNDB, dated April
15, 1986, in the principal amount of $9,000,000.00, as supplemented by that
certain Additional Note from NLP to and in favor of MNB dated December 17,
1987, in the principal amount of $550,000.00, as substituted by that certain
Substitute and Consolidation Note from NLP to and in favor of MNB dated
December 17, 1987, in the principal amount of $9,550,000.00, as amended by
that certain Amended and Restated Note, from NLP to and in favor of Travelers
dated March 28, 1994, in the principal amount of $8,325,000.00 (the "Original
Note");
WHEREAS, the property encumbered by the Original Mortgage and more
particularly described on Exhibit A, attached hereto (the "Property") was
subsequently conveyed to Borrower pursuant to that certain Covenant Deed from
NLP to Borrower dated April 22, 1994 and recorded April 29, 1994 in Official
Records Book 3382, Page 0081, Public Records of Polk County, Florida and
Borrower accepted the Property subject to the Original Mortgage;
WHEREAS, NLP also executed that certain Assignment of Leases, Rents
and Profits to and in favor of MNBD dated April 15, 1986 and recorded April
17, 1986 in Official Records Book 2413, Page 964, among the Public Records of
Polk County, Florida, as assigned by that certain Assignment of Mortgage and
Loan Documents from MNB to and in favor of Travelers dated December 15, 1987
(the "Original Assignment") the Original Note, the Original Mortgage, the
Original Assignment and all other loan documents executed in connection there
with are hereinafter referred to collectively as the "Original Loan
Documents";
WHEREAS, the Original Loan Documents were subsequently assigned and
transferred to Lender pursuant to that certain Assignment of Note and
Mortgage Agreements from Travelers to Lender dated on or about the date
hereof and recorded concurrently herewith; and
WHEREAS, the Original Loan Documents are now held by Lender; and
whereas the Original Note has a current principal balance in the original
principal amount of SEVEN MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS
($7,700,000.00); and
WHEREAS, Borrower desires to assume each and every obligation of NLP
under the Original Note, the Original Mortgage and the Original Assignment of
Rents; and
WHEREAS, Borrower and Lender desire to modify and amend the Original
Mortgage in order to reflect that the Original Mortgage secures the Note, and
to modify and amend certain other terms of the Original Mortgage;
NOW THEREFORE, for and in consideration of the premises and mutual
covenants herein contained and for and in consideration of the sum of TEN AND
NO/100 DOLLARS ($10.00) the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
1. All of the foregoing recitations are true and correct and are
hereby incorporated herein and made a part hereof.
2. Borrower hereby assumes each and every obligation of NLP under
the Original Loan Documents, whenever accruing, including, particularly, but
without limitation, the obligations of the Original Note and Borrower agrees
to perform all obligations of NLP under the Original Loan Documents and to
pay to Lender the sums due and to become due under the Original Loan
Documents as fully as if Borrower had executed the Original Loan Documents or
the date thereof as Original Borrower.
3. Under no circumstances shall this instrument or any portion
hereof constitute or be deemed to constitute a novation of the Original
Mortgage. The Original Mortgage, as hereby amended and restated, shall secure
the Note with the same priority of lien as if this instrument had been
executed and recorded at the same time as the Original Mortgage was
originally executed and recorded.
4. Borrower hereby covenants, stipulates, agrees and acknowledges
that the obligation of Borrower to repay to Lender the Note is hereby
declared to be secured by the Original Mortgage, as amended and restated
hereby, in the same manner and to the same extent as if the Note was made and
executed on the date that the Original Mortgage was originally executed and
delivered and that nothing herein contained shall diminish or in any way or
manner limit the right of Lender to make additional advances to the Borrower
pursuant to the provisions of Paragraph 37 of the Original Mortgage, as
amended and restated hereby.
5. Borrower hereby acknowledges, represents and confirms unto Lender
that (A) it does not now have and at no prior time had any defenses
(including without limitation, the defense of usury), claims, counterclaims,
cross-actions or equities, or rights of rescission, set off, abatement, or
diminution, with respect to the Original Loan Documents or the Note or the
Mortgage (as hereinafter defined) or any other loan documents executed in
connection therewith, and that it has at no time asserted any such defense,
claim or right of rescission, set off, abatement or diminution with respect
thereto, and if any such defense, claim counterclaim, cross-action or equity,
or rights of rescission, set off, abatement or diminution do exist the same
are hereby waived and released; (B) the Original Loan Documents are valid,
binding and free from any infirmity of any nature whatsoever, and are
enforceable in accordance with their respective terms; (C) the Original
Mortgage constitutes a valid first lien against the Property (defined
herein); and (D) no payments of interest or any other charges have been made
to Lender which would result in the computation or earning of interest in
excess of the maximum legal rate of interest permitted under the laws
applicable thereto.
6. The terms and conditions of the Mortgage are hereby amended and
superseded in their entirety; and the Original Mortgage is hereby restated in
its entirety (the Original Mortgage as so amended and restated being herein
referred to as the "Mortgage") as follows:
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (hereinafter referred to as the
"Mortgage") is made, executed and delivered as of the day and year first
written above, by AGREE LIMITED PARTNERSHIP, a Delaware limited partnership,
whose address is 31850 Northwestern Highway, Farmington Hills, Michigan,
48334 (hereinafter referred to as "Borrower"), to and in favor of NATIONWIDE
LIFE INSURANCE COMPANY, an Ohio corporation, having its principal office at
One Nationwide Plaza, Columbus, Ohio 43215-2220, Attention: Real Estate
Investment Department, 34T, or at such other place either within or without
the State of Ohio as it may from time to time designate, and any subsequent
holder(s) hereof (hereinafter referred to as "Lender");
W I T N E S S E T H:
WHEREAS, Borrower is justly indebted to Lender in the principal sum
of SEVEN MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS ($7,700,000.00)
with interest thereon, which indebtedness is evidenced and represented by
that certain Renewal Note of even date herewith in the sum of SEVEN MILLION
SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS ($7,700,000.00) payable to
Nationwide Life Insurance Company (said Renewal Note being hereinafter
referred to as the "Note"), which Note shall be due and payable on April 1,
2013 if the Modified Rate (as defined in the Note) is accepted by Borrower
and shall be due and payable on April 1, 2006 if the Modified Rate is
rejected by Borrower; and
WHEREAS, Lender, as a condition precedent to the extension of credit
and the making of the loan evidenced by the Note, has required that Borrower
provide Lender with security for the repayment of the indebtedness evidenced
by the Note as well as for the performance, observance and discharge by
Borrower of various covenants, conditions and agreements made by Borrower to,
with, in favor of and for the benefit of Lender with respect to said
indebtedness and such security;
NOW THEREFORE, in consideration of and in order to secure the
repayment of the indebtedness evidenced and represented by the Note, together
with interest on such indebtedness, as well as the payment of all other sums
of money secured hereby, as hereinafter provided, and also to secure the
observance, performance and discharge by Borrower of all covenants,
conditions and agreements set forth in the Note, this Mortgage and in all
other documents and instruments executed and delivered by Borrower to and in
favor of Lender for the purpose of further securing the repayment of the
indebtedness evidenced and represented by the Note, and in order to charge
the properties, interests and rights hereinafter described with such payment,
observance, performance and discharge, and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
Borrower does hereby grant, bargain, sell, alien, remise, release, convey,
assign, transfer, pledge, deliver, set over, hypothecate, warrant and confirm
unto Lender, its successors and assigns forever, all of Borrower's right,
title and interest in and to the following described properties, rights and
interests and all replacements thereof, substitutions therefor and additions
thereto (all of which are hereinafter together referred to as the
"Property"), to wit:
ALL THAT certain piece, parcel or tract of land or real property of
which Borrower is now seized and in actual or constructive
possession, situate in Polk County, Florida, more particularly
described on Exhibit A attached hereto and by this reference made a
part hereof (hereinafter referred to as the "Real Property");
TOGETHER WITH all buildings, structures and other improvements of
any kind, nature or description now or hereafter erected, constructed, placed
or located upon said Real Property (which buildings, structures and other
improvements are hereinafter sometimes together referred to as the
"Improvements"), including, without limitation, any and all additions to,
substitutions for or replacements of such Improvements;
TOGETHER WITH all mineral, royalties, gas rights, water, water
rights, water stock, flowers, shrubs, lawn plants, crops, trees, timber and
other emblements now or hereafter located on, under or above all or any part
of the Real Property;
TOGETHER WITH all and singular, the tenements, hereditaments, strips
and gores, rights-of-way, easements, privileges and other appurtenances now
or hereafter belonging or in any way appertaining to the Real Property,
including, without limitation, all right, title and interest of the Borrower
in any after-acquired right, title, interest, remainder or reversion, in and
to the beds of any ways, streets, avenues, roads, alleys, passages and public
places, open or proposed, in front of, running through, adjoining or adjacent
to said Real Property (hereinafter sometimes together referred to as the
"Appurtenances");
TOGETHER WITH any and all leases, contracts, rents, royalties,
issues, revenues, profits, proceeds, deposits, income and other benefits,
including accounts receivable, of, accruing to or derived from said Real
Property, Improvements and Appurtenances and any business or enterprise
presently situated or hereafter operated thereon and therewith (hereinafter
sometimes referred to as the "Rents");
TOGETHER WITH any and all awards, payments or settlements, including
interest thereon, and the right to receive the same, as a result of (a) the
exercise of the right to eminent domain, (b) the alteration of the grade of
any street, (c) any other injury, damage or casualty to, taking of, or
decrease in the value of, the Property or (d) proceeds of insurance awards,
to the extent of all amounts which may be secured by this Mortgage at the
date of any such award or payment including but not limited to the Reasonable
Attorneys' Fees (as hereinafter defined), costs and disbursements incurred by
Lender in connection with the collection of such award or payment;
AS WELL AS all the right, title and interest of Borrower in and to
all fixtures, goods, inventory, chattels, construction supplies and
materials, fittings, furniture, furnishings, equipment, machinery, apparatus,
appliances, and other items of personal property, whether tangible or
intangible, of any kind, nature or description, whether now owned or
hereafter acquired by Borrower, including, without limitation, all signs and
displays; all heating, air conditioning, water, gas, lighting, incinerating,
and power equipment; all engines, compressors, pipes, pumps, tanks, motors,
conduits, wiring, and switchboards; all plumbing, lifting, cleaning, fire
prevention, fire extinguishing, sprinkling, refrigerating, ventilating, waste
removal and communications equipment and apparatus; all boilers, furnaces,
oil burners, vacuum cleaning systems, elevators, and escalators; all stoves,
ovens, ranges, disposal units, dishwashers, water heaters, exhaust systems,
refrigerators, cabinets and partitions; all rugs, attached floor coverings,
curtains, rods, draperies, and carpets; all building materials, tools,
shades, awnings, blinds, screens, storm doors and windows; and all other
general intangibles, inventory, contract rights, accounts receivable, chattel
paper, documents and business records, of every kind, including, without
limitation, any and all licenses, permits, franchises, trademarks,
tradenames, service marks, or logos; any of which is, are or shall hereafter
be located upon, attached, affixed to or used or useful, either directly or
indirectly, in connection with the complete and comfortable use, occupancy
and operation of the Real Property, Improvements and Appurtenances as a
retail project, or any other business enterprise or operation as may
hereafter be conducted upon or within said Real Property, Improvements and
Appurtenances, as well as the proceeds thereof or therefrom regardless of
form (hereinafter sometimes referred to as the "Fixtures and Personal
Property", which term expressly excludes any toxic wastes or substances
deemed hazardous under federal, state or local laws). Borrower hereby
expressly grants to Lender a present security interest in and lien and
encumbrance upon said Fixtures and Personal Property;
TO HAVE AND TO HOLD the foregoing Property and the rights hereby
granted for the use and benefit of Lender, its successors and assigns in fee
simple forever;
AND Borrower covenants and warrants with and to Lender that Borrower
is indefeasibly seized of the Property and has good right, full power, and
lawful authority to convey and encumber all of the same as aforesaid; that
Borrower hereby fully warrants the title to the Property and will defend the
same and the validity and priority of the lien and encumbrance of this
Mortgage against the lawful claims of all persons whomsoever; and Borrower
further warrants that the Property is free and clear of all liens and
encumbrances of any kind, nature or description, save and except only (with
respect to said Real Property, Improvements and Appurtenances) for real
property taxes for years subsequent to 1998 (which are not yet due and
payable) and those matters set forth in the title insurance policy issued to
Lender insuring the first lien priority of this Mortgage (hereinafter
referred to as the "Permitted Exceptions");
PROVIDED ALWAYS, however, that if Borrower shall pay unto Lender the
indebtedness evidenced by the Note, and if Borrower shall duly, promptly and
fully perform, discharge, execute, effect, complete and comply with and abide
by each and every one of the agreements, conditions and covenants of the
Note, this Mortgage and all other documents and instruments executed as
further evidence of or as security for the indebtedness secured hereby, then
this Mortgage and the estates and interests hereby granted and created shall
cease, terminate and be null and void, and shall be discharged of record at
the expense of Borrower, which expense Borrower agrees to pay;
AND Borrower, for the benefit of Lender, and its successors and
assigns, does hereby expressly covenant and agree:
1. Payment of Principal and Interest. To pay the principal of the
indebtedness evidenced by the Note, together with all interest thereon, in
accordance with the terms of the Note, promptly at the times, at the place
and in the manner that said principal and interest shall become due, and to
promptly and punctually pay all other sums required to be paid by Borrower
pursuant to the terms of the Note, this Mortgage, and all other documents and
instruments executed as further evidence of, as additional security for or in
connection with the indebtedness evidenced by the Note and secured by this
Mortgage (hereinafter together referred to as the "Loan Documents").
2. Performance of Other Obligations. To perform, comply with and
abide by each and every one of the covenants, agreements and conditions
contained and set forth in the Note, this Mortgage and the other Loan
Documents and to comply with all laws, ordinances, rules, regulations and
orders of governmental authorities now or hereafter affecting the Property or
requiring any alterations or improvements to be made thereon, and perform all
of its obligations under any covenant, condition, restriction or agreement
affecting the Property and to insure that at all times the Property
constitutes one or more legal lots capable of being conveyed without
violation of any applicable subdivision or platting laws, ordinances, rules
or regulations, or other laws relating to the division or separation of real
property.
3. Preservation and Maintenance of Property; Accessibility;
Hazardous Waste. To keep all Improvements now existing or hereafter erected
on the Real Property in good order and repair and not to do or permit waste,
impairment or deterioration thereof or thereon, nor to alter, remove or
demolish any of said Improvements or any Fixtures or Personal Property
attached or appertaining thereto, without the prior written consent of
Lender, nor to initiate, join in or consent to any change in any private
restrictive covenant, zoning ordinance or other public or private
restrictions limiting or defining the uses which may be made of the Property
or any part thereof, nor to do or permit any other act whereby the Property
shall become less valuable, be used for purposes contrary to applicable law
or used in any manner which will increase the premium for or result in a
termination or cancellation of the insurance hereinafter required to be kept
and maintained on the Property. In furtherance of, and not by way of
limitation upon, the foregoing covenant, Borrower shall effect such repairs
as Lender may reasonably require, and from time to time make all needful and
proper replacements so that the Improvements, Appurtenances, Fixtures and
Personal Property will, at all times, be in good condition, fit and proper
for the respective purposes for which they were originally erected or
installed.
Borrower at all times shall maintain the Property in full compliance
with all applicable federal, state or municipal laws, ordinances, rules and
regulations currently in existence or hereinafter enacted or rendered
governing accessibility for the disabled or handicapped, including, but not
limited to, The Architectural Barriers Act of 1968, The Rehabilitation Act of
1973, The Fair Housing Act of 1988, The Americans with Disabilities Act, The
Florida Accessibility Code and The Florida Americans With Disabilities
Accessibility Implementation Act, and all regulations and guidelines
promulgated under any of the foregoing, as the same may be amended from time
to time (collectively the "Accessibility Laws"). Pursuant to the terms of a
separate Accessibility Indemnity Agreement of even date herewith executed by
Borrower to and in favor of Lender (the "Accessibility Indemnity Agreement"),
Borrower agrees to indemnify Lender and hold Lender harmless from and against
any and all losses, liabilities, damages, injuries, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered by or
asserted against Lender arising, either directly or indirectly, out of any
noncompliance of the Property with any Accessibility Laws or any claimed
breach or violation thereof by Borrower or the Property, regardless of
whether or not caused by, or within the control of, Borrower. The
indemnification agreement of Borrower contained in the foregoing sentence and
in the Accessibility Indemnity Agreement shall survive repayment of the Note
and satisfaction of this Mortgage, except as otherwise provided in
subparagraph (11) in the Exculpation section of the Note.
Borrower at all times shall keep the Property and ground water of
the Property free of Hazardous Materials (as defined in that certain
Hazardous Materials Indemnity Agreement of even date herewith executed by
Borrower to and in favor of Lender (the "Hazardous Materials Indemnity
Agreement")). Borrower shall not permit its tenants or any third party
requiring the consent of Borrower to enter the Property, to use, generate,
manufacture, store, release, threaten release, or dispose of Hazardous
Materials in, on or about the Property or the ground water of the Property in
violation of any federal, state or municipal law, decision, statute, rule,
ordinance or regulation currently in existence or hereinafter enacted or
rendered. Borrower shall give Lender prompt written notice of any claim by
any person, entity, or governmental agency that a significant release or
disposal of Hazardous Materials has occurred on the Property and shall remove
same in compliance with the terms and conditions of the Hazardous Materials
Indemnity Agreement.
Notwithstanding anything to the contrary herein contained, Borrower
shall not be required to remove Hazardous Materials from the Property
provided that either (i) the Property is in compliance with all Hazardous
Materials Laws, or (ii) Borrower has received a written waiver or variance
from such Hazardous Materials Laws with respect to the Property from the
federal, state or local governmental agency having jurisdiction over the
Property.
Pursuant to the terms of the Hazardous Materials Indemnity
Agreement, Borrower agrees to indemnify Lender and hold Lender harmless from
and against any and all losses, liabilities, damages, injuries, costs,
expenses and claims of any and every kind whatsoever paid, incurred or
suffered by, or asserted against Lender for, with respect to, or as a direct
or indirect result of, the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or release from, the
Property of any Hazardous Materials (including, without limitation, any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Hazardous Materials Laws) regardless of whether or not
caused by, or within the control of, Borrower.
Lender, and/or its agents, shall, subject to the rights of tenants
under Leases approved by Lender, have the right and shall be permitted, but
shall not be required, at all reasonable times, to enter upon and inspect the
Property to insure compliance with the foregoing covenants and any and all
other covenants, agreements and conditions set forth in this Mortgage. The
Hazardous Materials Indemnity Agreement, the provisions of this Paragraph 3
and similar provisions in this Mortgage and the other Loan Documents
concerning Hazardous Materials shall survive repayment of the Note and
satisfaction of this Mortgage; provided, however, that such liability shall
not survive the repayment and satisfaction of the Note, Mortgage and other
Loan Documents if contemporaneously with such repayment and satisfaction
Borrower furnishes Lender with an environmental assessment report acceptable
to Lender reflecting that the Property is free from Hazardous Materials and
not in violation of Hazardous Materials Laws (as defined in the Hazardous
Materials Indemnity Agreement); and provided further that Borrower shall not
be liable by way of indemnification with respect to Hazardous Materials as
provided herein or in the Hazardous Materials Indemnity Agreement if the
Property becomes contaminated subsequent to Lender's acquisition of title to
the Property by foreclosure of this Mortgage or acceptance of a deed in lieu
thereof or subsequent to any transfer of title to all (but not less than all)
of the Property by means of a transfer approved by Lender pursuant to this
Mortgage, provided that such transferee assumes in writing all obligations of
Borrower with respect to Hazardous Materials pursuant to this Mortgage and
the Hazardous Materials Indemnity Agreement. The burden of proof under the
preceding sentence with regard to establishing the date upon which any
Hazardous Materials were placed or appeared in, on or under the Property
shall be upon Borrower.
For purposes of this Paragraph 3, Borrower shall be construed to
include each general partner of Borrower.
4. Payment of Taxes, Assessments and Other Charges. To pay or cause
to be paid all and singular such taxes, assessments and public charges as
already levied or assessed or that may be hereafter levied or assessed upon
or against the Property, when the same shall become due and payable according
to law, before the same become delinquent, and before any interest or penalty
shall attach thereto, and to deliver official receipts evidencing the payment
of the same to Lender not later than thirty (30) days following the payment
of the same. Borrower shall have the right to contest, in good faith, the
proposed assessment of ad valorem taxes or special assessments by
governmental authorities having jurisdiction over the Property; provided,
however, Borrower shall give written notice thereof to Lender and Lender may,
in its sole discretion, require Borrower to post a bond or other collateral
satisfactory to Lender in connection with any such action by Borrower.
5. Payment of Liens, Charges and Encumbrances. To immediately pay
and discharge from time to time when the same shall become due all lawful
claims and demands of mechanics, materialmen, laborers and others which, if
unpaid, might result in, or permit the creation of, a lien, charge or
encumbrance upon the Property or any part thereof, or on the rents, issues,
income, revenues, profits and proceeds arising therefrom and, in general, to
do or cause to be done everything necessary so that the lien of this Mortgage
shall be fully preserved at the cost of Borrower, without expense to Lender.
Borrower shall have the right to contest, in good faith, and in accordance
with applicable laws and procedures, mechanics' and materialmen's liens filed
against the Property; provided however, that Borrower shall give written
notice thereof to Lender, and Lender may, at its sole option, require
Borrower to post a bond or other collateral satisfactory to Lender (and the
title insurance company insuring the Mortgage) in connection with any such
action by Borrower.
6. Payment of Junior Encumbrances. To permit no default or
delinquency under any other lien, imposition, charge or encumbrance against
the Property, even though junior and inferior to the lien of this Mortgage;
provided however, the foregoing shall not be construed to permit any other
lien or encumbrance against the Property.
7. Payment of Mortgage Taxes. To pay any and all taxes which may be
levied or assessed directly or indirectly upon the Note and this Mortgage
(except for income taxes payable by Lender) or the debt secured hereby,
without regard to any law which may be hereafter enacted imposing payment of
the whole or any part thereof upon Lender, its successors or assigns. Upon
violation of this agreement to pay such taxes levied or assessed upon the
Note and this Mortgage, or upon the rendering by any court of competent
jurisdiction of a decision that such an agreement by Borrower is legally
inoperative, or if any court of competent jurisdiction shall render a
decision that the rate of said tax when added to the rate of interest
provided for in the Note exceeds the then maximum rate of interest allowed by
law, then, and in any such event, the debt hereby secured shall, at the
option of Lender, its successors or assigns, become immediately due and
payable, anything contained in this Mortgage or in the Note secured hereby
notwithstanding, without the imposition of a Prepayment Premium (as defined
in the Note). The additional amounts which may become due and payable
hereunder shall be part of the debt secured by this Mortgage.
8. Hazard Insurance. To continuously, during the term hereof, keep
the Improvements and the Fixtures and Personal Property now or hereafter
existing, erected, installed and located in or upon the Real Property
insured, with extended coverage, against loss or damage resulting from fire,
windstorm, flood, sinkhole and such other hazards, casualties, contingencies
and perils including, without limitation, other risks insured against by
persons operating like properties in the locality of the Property, or
otherwise deemed necessary by Lender, on such forms as may be required by
Lender, covering the Property in the amount of the full replacement cost
thereof, less excavating and foundation costs (provided, however, in no case
shall the amount of insurance be less than the difference between the amount
of the Note and eighty percent (80%) of the appraised value of the Real
Property) covering all loss or abatement of rental or other income without a
provision for co-insurance in an amount equal to the scheduled rental income
from the Property for at least twelve (12) months or, if applicable, business
interruption insurance in an amount sufficient to pay debt service on the
Note, operating expenses, taxes and insurance on the Property for a period of
twelve (12) months, and covering loss by flood (if the Property lies in a
specified Flood Hazard Area as designated on the Department of Housing and
Urban Development Maps, or other flood prone designation) in an amount equal
to the outstanding principal balance of the indebtedness secured hereby or
such other amount as approved by Lender. All such insurance shall be carried
with a company or companies acceptable to Lender, which company or companies
shall have a rating at the time this Mortgage is executed and during the
entire term of the Note equivalent to at least A:VIII as shown in the most
recent Best's Key Rating Guide, and the original policy or policies and
renewals thereof (or, at the sole option of Lender, duplicate originals or
certified copies thereof), together with receipts evidencing payment of the
premium therefor, shall be deposited with, held by and are hereby assigned to
Lender as additional security for the indebtedness secured hereby. Each such
policy of insurance shall contain a non-contributing loss payable clause in
favor of and in form acceptable to Lender and shall provide for not less than
thirty (30) days prior written notice to Lender of any intent to modify,
cancel or terminate such policies of insurance. If the insurance required
under this Paragraph 8 or any portion thereof is maintained pursuant to a
blanket policy, Borrower shall furnish to Lender a certified copy of such
policy, together with an original certificate indicating that Lender is an
insured under such policy in regard to the Property and showing the amount of
coverage apportioned to the Property which coverage shall be in an amount
sufficient to satisfy the requirements hereof. Not less than fifteen (15)
days prior to the expiration dates of each policy required of Borrower
hereunder, Borrower will deliver to Lender a renewal policy or policies
marked "premium paid" or accompanied by other evidence of payment and renewal
satisfactory to Lender; and in the event of foreclosure of this Mortgage, any
purchaser or purchasers of the Property shall succeed to all rights of
Borrower, including any rights to unearned premiums, in and to all insurance
policies assigned and delivered to Lender pursuant to the provisions of this
Paragraph 8. Notwithstanding the foregoing, to the extent that any Major
Tenant (as hereinafter defined) elects to self insure, such self-insurance
will be accepted by Lender provided that (a) the Major Tenant maintains a
minimum net worth of $100 million, as evidenced by the financial statement
provided pursuant to Paragraph 12, (b) the Major Tenant provides written
verification of such self-insurance and (c) the Major Tenant Lease (as
hereinafter defined) is approved by Lender.
In the event of loss by reason of hazards, casualties, contingencies
and perils for which insurance has been required by Lender hereunder,
Borrower shall give immediate notice thereof to Lender, and Lender is hereby
irrevocably appointed as attorney-in-fact coupled with an interest, for
Lender to, at its option, make proof of loss if not made promptly by
Borrower, and each insurance company concerned is hereby notified, authorized
and directed to make payment for such loss directly to Lender, instead of to
Borrower and Lender jointly, and Borrower hereby authorizes Lender to adjust
and compromise any losses for which insurance proceeds are payable under any
of the aforesaid insurance policies and, after deducting the costs of
collection, to apply the proceeds of such insurance, at its option, as
follows: (a) to the restoration or repair of the insured Improvements,
Fixtures and Personal Property, provided that, in the opinion and sole
discretion of Lender, such restoration or repair is reasonably practical and,
provided further, that, in the opinion and sole discretion of Lender, either:
(i) the insurance proceeds so collected are sufficient to cover the cost of
such restoration or repair of the damage or destruction with respect to which
such proceeds were paid, or (ii) the insurance proceeds so collected are not
sufficient alone to cover the cost of such restoration or repair, but are
sufficient therefor when taken together with funds provided and made
available by Borrower from other sources; in which event Lender shall make
such insurance proceeds available to Borrower for the purpose of effecting
such restoration or repair; but Lender shall not be obligated to see to the
proper application of such insurance proceeds nor shall the amount of funds
so released or used be deemed to be payment of or on account of the
indebtedness secured hereby, or (b) to the reduction of the indebtedness
secured hereby, notwithstanding the fact that the amount owing thereon may
not then be due and payable or that said indebtedness is otherwise adequately
secured, in which event such proceeds shall be applied at par against the
indebtedness secured hereby and the monthly payment due on account of such
indebtedness shall be reduced accordingly. None of such actions taken by
Lender shall be deemed to be or result in a waiver or impairment of any
equity, lien or right of Lender under and by virtue of this Mortgage, nor
will the application of such insurance proceeds to the reduction of the
indebtedness serve to cure any default in the payment thereof. In the event
of foreclosure of this Mortgage or other transfer of title to the Property in
extinguishment of the indebtedness secured hereby, all right, title and
interest of Borrower in and to any insurance policies then in force and
insurance proceeds then payable shall pass to the purchaser or grantee.
In the case of Borrower's failure to keep the Property so insured,
Lender or its assigns may, at its option (but shall not be required to)
obtain such insurance at Borrower's expense.
Notwithstanding anything set forth in this Paragraph 8 to the
contrary, in the event of loss or damage to the Property by fire or other
casualty for which insurance has been required by Lender and provided by
Borrower, and the amount of such loss or damage does not exceed fifty percent
(50%) of the outstanding principal balance of the Note, then Lender hereby
agrees to allow the proceeds of insurance to be used for the restoration of
the Property and to release such insurance proceeds to Borrower as such
restoration progresses, provided:
a. Borrower is not in default under any of the terms, covenants and
conditions of this Mortgage, the Note or any of the Loan
Documents evidencing or securing the Note;
b. The Property, after such restoration, will be at least eighty
percent (80%) leased pursuant to leases approved in writing by
Lender;
c. The plans and specifications for the restoration of the Property
are approved in writing by Lender;
d. At all times during such restoration, Borrower has deposited with
Lender funds which, when added to such insurance proceeds, are
sufficient to complete the restoration of the Property in
accordance with the approved plans and specifications and all
applicable building code and zoning ordinances and regulations,
and further, that the sufficiency of such funds is certified to
Lender by Lender's inspecting architect/engineer;
e. Borrower provides completion, payment and performance bonds and
builders' all risk insurance for such restoration in form and
amount acceptable to Lender;
f. The insurer under such policies of fire or other casualty
insurance does not assert any defense to payment under such
policies against Lender, Borrower or any tenant of the Property;
g. The insurance proceeds held by Lender shall be disbursed no more
often than once per month and in not more than five (5)
increments of not less than FIFTY THOUSAND AND NO/100 DOLLARS
($50,000.00) each (except the final disbursement of such proceeds
which may be in an amount less than $50,000.00). Lender's
obligation to make any such disbursement shall be conditioned
upon Lender's receipt of written certification from Lender's
inspecting architect/engineer that all construction and work for
which such disbursement is requested has been completed in
accordance with the approved plans and specifications and all
applicable building codes, zoning ordinances and all other
applicable federal, state or local laws, ordinances or
regulations, and, further, that Borrower has deposited with
Lender sufficient funds to complete such restoration in
accordance with subparagraph (d) above;
h. Lender shall have the option, upon the completion of such
restoration of the Property, to apply any surplus insurance
proceeds remaining after the completion of such restoration, at
par, to the reduction of the indebtedness secured by this
Mortgage, notwithstanding the fact that the amount owing thereon
may not then be due and payable or that said indebtedness may
otherwise be adequately secured; and
i. Lender shall be entitled to require and to impose such other
conditions to the release of such insurance proceeds for
restoration of the Property as would be customarily or reasonably
required and imposed by a construction lender for a project of
similar nature and cost.
Further notwithstanding anything set forth in this Paragraph 8 to
the contrary, in the event of loss or damage to the Property by fire or other
casualty for which insurance has been required by Lender and provided by
Borrower (or for which a Major Tenant has been permitted to self insure),
Lender agrees that, so long as Borrower is not then in default under the
terms of this Mortgage, the Note or any of the other Loan Documents, the
insurance proceeds or the proceeds of self-insurance, as applicable, shall,
subject to the conditions contained in Subparagraphs 8(c) through 8(i)
hereinabove, be made available by Lender for the restoration of premises
leased by a Major Tenant, to the extent such restoration is required under
such Major Tenant Lease.
9. Liability Insurance. To carry and maintain such comprehensive
general liability insurance as may from time to time be required by Lender on
forms, in amounts and with such company or companies as may be acceptable to
Lender, taking into account the type and nature of the Property and the
business being operated thereon, and the corresponding liability exposure.
All such comprehensive general liability insurance shall be carried with a
company or companies which have a current rating equivalent to at least
A:VIII as shown in Best's Key Rating Guide. Such policy or policies of
insurance shall name Lender as an additional insured and shall provide for
not less than thirty (30) days' prior written notice to Lender of
modification, cancellation, termination or expiration of such policy or
policies of insurance. Not less than fifteen (15) days prior to the
expiration dates of such policy or policies, Borrower will deliver to Lender
a renewal policy or policies marked "premium paid" or accompanied by other
evidence of payment and renewal satisfactory to Lender. The original policy
or policies and all renewals thereof (or, at the sole option of Lender,
duplicate originals or certified copies thereof), together with receipts
evidencing payment of the premium therefor, shall be deposited with, held by
and are hereby assigned to Lender as additional security for the indebtedness
secured hereby. If the insurance required under this Paragraph 9 or any
portion thereof is maintained pursuant to a blanket policy, Borrower shall
furnish to Lender a certified copy of such policy, together with an original
certificate indicating that Lender is an insured under such policy in regard
to the Property and showing the amount of coverage apportioned to the
Property which coverage shall be in an amount sufficient to satisfy the
requirements hereof.
10. Compliance With Laws. To observe, abide by and comply with all
statutes, ordinances, laws, orders, requirements or decrees relating to the
Property enacted, promulgated or issued by any federal, state, county or
municipal authority or any agency or subdivision thereof having jurisdiction
over Borrower or the Property, and to observe and comply with all conditions
and requirements necessary to preserve and extend any and all rights,
licenses, permits (including, but not limited to, zoning, variances, special
exceptions and nonconforming uses), privileges, franchises and concessions
which are applicable to the Property or which have been granted to or
contracted for by Borrower in connection with any existing, presently
contemplated or future use of the Property.
11. Maintenance of Permits. To obtain, keep and constantly maintain
in full force and effect during the entire term of this Mortgage, all
certificates, licenses and permits necessary to keep the Property operating
as a retail project and, except as specifically provided for in this
Mortgage, not to assign, transfer or in any manner change such certificates,
licenses or permits without first receiving the written consent of Lender.
12. Obligations of Borrower as Lessor. To perform every obligation
of Borrower (as the lessor) and enforce every obligation of the lessee in any
and every lease or other occupancy agreement of or affecting the Property or
any part thereof (hereinafter referred to as the "Occupancy Leases"), and not
to modify, alter, waive, or cancel any such Occupancy Leases or any part
thereof, nor collect for more than thirty (30) days in advance any rents that
may be collectible under any such Occupancy Leases and, except as provided
for in this Mortgage, not to assign any such lease or Occupancy Lease or any
such rents to any party other than Lender, without the prior written consent
of Lender; provided, however, that the consent of Lender shall not be
required for any such actions undertaken by Borrower in the ordinary course
of its business with respect to tenants occupying less than three thousand
(3,000) square feet in the Improvements. In the event of default under any
such Occupancy Lease by reason of failure of the Borrower to keep or perform
one or more of the covenants, agreements or conditions thereof, Lender is
hereby authorized and empowered, and may, at its sole option, but without
obligation to do so, remedy, remove or cure any such default, and further,
Lender may, at its sole option and in its sole discretion, pay any sum of
money deemed necessary by it for the performance of said covenants,
agreements and conditions, or for the curing or removal of any such default,
and incur all expenses and obligations which it may consider necessary or
reasonable in connection therewith, and Borrower shall repay on demand all
such sums so paid or advanced by Lender together with interest thereon until
paid at the lesser of either (i) the highest rate then allowed by the laws of
the State of Florida, or, if controlling, the laws of the United States, or
(ii) the then applicable interest rate on the Note plus five percent (5%) per
annum; all of such sums, if unpaid, shall be added to and become part of the
indebtedness secured hereby. All such Occupancy Leases hereafter made shall
be subject to the approval of Lender and (a) shall be at competitive market
rental rates then prevailing in the geographic area for retail projects
comparable to the Property, (b) shall have lease terms of not less than three
(3) years, and (c) at Lender's option, shall be superior or subordinate in
all respects to the lien of this Mortgage. Pro vided, however, that Lender
shall not require approval in advance of any Occupancy Leases which conform
to the Borrower's Form Lease (as hereinafter defined) as previously approved
by Lender except as set forth below. Neither the right nor the exercise of
the right herein granted unto Lender to keep or perform any such covenants,
agreements or conditions as aforesaid shall preclude Lender from exercising
its option to cause the whole indebtedness secured hereby to become
immediately due and payable by reason of Borrower's default in keeping or
performing any such covenants, agreements or conditions as hereinabove
required.
Lender has heretofore approved a form of Occupancy Lease to be used
by Borrower in connection with the Property (hereinafter referred to as the
"Form Lease"). Borrower shall not, with out the prior written consent of
Lender, modify or alter the Form Lease in any material respect. In addition,
Borrower shall not, without the prior written consent of Lender, surrender or
terminate, either orally or in writing, any Occupancy Lease now existing or
hereafter made with any Major Tenant (as hereinafter defined) for all or part
of the Property, permit an assignment or sublease of any such Occupancy
Lease, or request or consent to the subordination of any Occupancy Lease to
any lien subordinate to this Mortgage. Borrower shall furnish Lender with
copies of all executed Occupancy Leases of all or any part of the Property
now existing or hereafter made, and Borrower shall assign to Lender (which
assignment shall be in form and content acceptable to Lender), as additional
security for the Note, all Occupancy Leases now existing or hereafter made
for all or any part of the Property.
Notwithstanding the foregoing approval by Lender of Borrower's Form
Lease, Lender hereby specifically reserves the right to approve all
prospective tenants under all Occupancy Leases hereafter proposed to be made
if: (i) the term thereof, excluding options to renew the same, exceeds five
(5) years, or (ii) the net rentable area to be occupied thereunder, including
expansion options, exceeds ten percent (10%) of the net leasable area of the
Improvements (the tenants under such leases being hereinafter referred to as
"Major Tenants"). Borrower shall notify Lender in writing of all prospective
Major Tenants and shall deliver to Lender, at Borrower's sole cost and
expense, a copy of the prospective Major Tenant's current financial statement
and the most recent Dun & Bradstreet credit report on said prospective Major
Tenant. Said financial statement shall be certified as true and correct by
the Major Tenant, or, if available, by a certified public accountant.
13. Maintenance of Parking and Access; Prohibition Against
Alteration. To construct, keep and constantly maintain, as the case may be,
all curbs, drives, parking areas and the number of parking spaces heretofore
approved by Lender or heretofore or hereafter required by any governmental
body, agency or authority having jurisdiction over Borrower or the Property;
and not to alter, erect, build or construct upon any portion of the Property,
any building or structure of any kind whatsoever, the erection, building or
construction of which has not been previously approved by Lender in writing,
which approval shall be at the sole discretion of Lender.
14. Execution of Additional Documents. To do, execute, acknowledge
and deliver all and every such further acts, deeds, conveyances, mortgages,
assignments, notices of assignments, transfers, assurances and other
instruments, including security agreements and financing statements, as
Lender shall from time to time require for the purpose of better assuring,
conveying, assigning, transferring and confirming unto Lender the Property
and rights hereby encumbered, created, conveyed, assigned or intended now or
hereafter so to be encumbered, created, conveyed or assigned or which
Borrower may now be or may hereafter become bound to encumber, create,
convey, or assign to Lender, or for the purpose of carrying out the intention
or facilitating the performance of the terms of this Mortgage, or for filing,
registering or recording this Mortgage, and to pay all filing, registration
or recording fees and all taxes, costs and other expenses, including
Reasonable Attorneys' Fees (as defined in Paragraph 40), incident to the
preparation, execution, acknowledgment, delivery and recordation of any of
the same.
15. After-Acquired Property Secured. It is understood and agreed
that all right, title and interest of Borrower in and to all extensions,
improvements, betterments, renewals, substitutions and replacements of, and
all additions and appurtenances to, the Property hereinabove described,
hereafter acquired by or released to Borrower, or constructed, assembled or
placed by Borrower on the Real Property, and all conversions of the security
constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, encumbrance, conveyance,
assignment or other act by Borrower, shall become subject to the lien of this
Mortgage as fully and completely and with the same effect as though now owned
by Borrower and specifically described herein, but at any and all times
Borrower will execute and deliver to Lender any and all such further
assurances, mortgages, conveyances, or assignments thereof or security
interests therein as Lender may reasonably require for the purpose of
expressly and specifically subjecting the same to the lien of this Mortgage.
16. Payments by Lender on Behalf of Borrower. Should Borrower fail
to make payment of any taxes, assessments or public charges on or with
respect to the Property before the same shall become delinquent, or shall
fail to make payment of any insurance premiums or other charges, impositions,
or liens herein or elsewhere required to be paid by Borrower, then Lender, at
its sole option, but without obligation to do so, may make payment or
payments of the same and also may redeem the Property from tax sale without
any obligation to inquire into the validity of such taxes, assessments and
tax sales. In the case of any such payment by Lender, Borrower agrees to
reimburse Lender, upon demand therefor, the amount of such payment and of any
fees and expenses attendant in making the same, together with interest
thereon at the lesser of either (i) the highest rate then allowable by the
laws of the State of Florida or, if controlling, the laws of the United
States, or (ii) the then applicable interest rate of the Note plus five
percent (5%) per annum; and until paid such amounts and interest shall be
added to and become part of the debt secured hereby to the same extent that
this Mortgage secures the repayment of the indebtedness evidenced by the
Note. In making payments hereby authorized by the provisions of this
Paragraph 16, Lender may do so whenever, in its sole judgment and discretion,
such advance or advances are necessary or desirable to protect the full
security intended to be afforded by this instrument. Neither the right nor
the exercise of the right herein granted unto Lender to make any such
payments as aforesaid shall preclude Lender from exercising its option to
cause the whole indebtedness secured hereby to become immediately due and
payable by reason of Borrower's default in making such payments as
hereinabove required.
17. Funds Held by Lender for Taxes, Insurance and Other Charges. In
order to more fully protect the security of this Mortgage, Borrower shall
deposit with Lender, together with and in addition to each monthly payment
due on account of the indebtedness evidenced by the Note, an amount equal to
one-twelfth (1/12) of the annual total of such taxes, insurance and other
charges (all as estimated by Lender in its sole discretion) so that, at least
thirty (30) days prior to the due date thereof, Lender shall be able to pay
in full all such taxes, insurance and other charges as the same shall become
due, and Lender may hold the sums so deposited without interest and
commingled with its general funds and apply the same to the payment of said
taxes, insurance or other charges as they become due and payable. If at any
time the funds so held by Lender are insufficient to pay such insurance or
other charges as they become due and payable Borrower shall immediately, upon
notice and demand by Lender, deposit with Lender the amount of such
deficiency, and the failure on the part of Borrower to do so shall entitle
Lender, at its sole option, to make such payments in accordance with its
right and pursuant to the conditions elsewhere provided in this Mortgage.
Whenever any default exists under this Mortgage, Lender may, at its sole
option but without an obligation so to do, apply any funds so held by it
pursuant to this Paragraph 17 toward the payment of the indebtedness secured
hereby, notwithstanding the fact that the amount owing thereon may not then
be due and payable or that said indebtedness may otherwise be adequately
secured, in such order and manner of application as Lender may elect.
18. Condemnation; Eminent Domain. All awards and other compensation
heretofore or hereafter made to Borrower and all subsequent owners of the
Property in any taking by eminent domain or recovery for inverse
condemnation, either permanent or temporary, of all or any part of the
Property or any easement or any appurtenance thereto, including severance and
consequential damages and change in grade of any street, are hereby assigned
to Lender, and Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, and authorizes, directs and
empowers such attorney, at the option of said attorney, on behalf of
Borrower, its successors and assigns, to adjust or compromise the claim for
any such award and alone to collect and receive the proceeds thereof, to give
proper receipts and acquittances therefor and, after deducting any expenses
of collection, at its sole option:
(i) To apply the net proceeds as a credit upon any portion of
the indebtedness secured hereby, as selected by Lender,
notwithstanding the fact that the amount owing thereon may
not then be due and payable or that the indebtedness is
otherwise adequately secured. In the event Lender applies
such awards to the reduction of the outstanding
indebtedness evidenced by the Note, such proceeds shall be
applied at par and the monthly installments due and payable
under the Note shall be reduced accordingly; however no
such application shall serve to cure an existing default in
the payment of the Note; or
(ii) To hold said proceeds without any allowance of interest and
make the same available for restoration or rebuilding the
Property. In the event that Lender elects to make said
proceeds available to reimburse Borrower for the cost of
the restoration or rebuilding of the building(s) or other
Improvements on the Property, such proceeds shall be made
available in the manner and under the conditions that
Lender may require as provided under Paragraph 8 hereof. If
the proceeds are made available by Lender to reimburse
Borrower for the cost of said restoration or rebuilding,
any surplus which may remain out of said award after
payment of such cost of restoration or rebuilding shall be
applied on account of the indebtedness secured hereby at
par, notwithstanding the fact that the amount due and owing
thereon may not then be due and payable or that said
indebtedness may otherwise be adequately secured.
Borrower further covenants and agrees to give Lender immediate
notice of the actual or threatened commencement of any proceedings under
eminent domain and to deliver to Lender copies of any and all papers served
in connection with any proceedings. Borrower further covenants and agrees to
make, execute and deliver to Lender, at any time or times, upon request,
free, clear and discharged of any encumbrance of any kind whatsoever, any and
all further assignments and/or other instruments deemed necessary by Lender
for the purpose of validly and sufficiently assigning all such awards and
other compensation heretofore or hereafter made to Lender (including the
assignment of any award from the United States government at any time after
the allowance of the claim therefor, the ascertainment of the amount thereof
and the issuance of the warrant for payment thereof).
If any part of any of the Improvements situated on the Property
shall be condemned by any governmental authority having jurisdiction, or if
lands constituting a portion of the Property shall be condemned by any
governmental authority having jurisdiction, such that the Property is in
violation of applicable parking, zoning, platting or other ordinances, or
fails to comply with the terms of any Major Tenant Occupancy Leases, then in
any such event, at the election of Lender, the whole of the indebtedness
hereby secured shall become immediately due and payable at par (i.e., without
Prepayment Premium) and Lender shall be entitled to exercise any or all
remedies provided or referenced in this Mortgage.
19. Costs of Collection. In the event that the Note secured hereby
is placed in the hands of an attorney for collection, or in the event that
Lender shall become a party either as plaintiff or as defendant, in any
action, suit, appeal or legal proceeding (including, without limitation,
foreclosure, condemnation, bankruptcy or administrative proceedings or any
proceeding wherein proof of claim is by law required to be filed), hearing,
motion or application before any court or administrative body in relation to
the Property or the lien and security interest granted or created hereby or
herein, or for the recovery or protection of said indebtedness or the
Property, or for the foreclosure of this Mortgage, Borrower shall save and
hold Lender harmless from and against any and all costs and expenses incurred
by Lender on account thereof, including, but not limited to, Reasonable
Attorneys' Fees, title searches and abstract and survey charges, at all trial
and appellate levels, and Borrower shall repay, on demand, all such costs and
expenses, together with interest thereon until paid at the lesser of either
(i) the highest rate then allowed by the laws of the State of Florida or, if
controlling, the laws of the United States, or (ii) the then applicable rate
of interest of the Note plus five percent (5%) per annum; all of which sums,
if unpaid, shall be added to and become a part of the indebtedness secured
hereby.
20. Default Rate. Any sums not paid when due, whether maturing by
lapse of time or by reason of acceleration under the provisions of the Note
or this Mortgage, and whether principal, interest or money owing for
advancements pursuant to the terms of this Mortgage or any of the other Loan
Documents, shall bear interest until paid at the lesser of either (i) the
highest rate then allowed by the laws of the State of Florida or, if
controlling, the laws of the United States, or (ii) the then applicable rate
of interest of the Note plus five percent (5%) per annum, all of which sums
shall be added to and become a part of the indebtedness secured hereby.
21. Savings Clause; Severability. Notwithstanding any provisions in
the Note or in this Mortgage to the contrary, the total liability for
payments in the nature of interest including but not limited to Prepayment
Premiums, default interest and late fees shall not exceed the limits imposed
by the laws of the State of Florida or, if controlling, the United States of
America relating to maximum allowable charges of interest. Lender shall not
be entitled to receive, collect or apply, as interest on the indebtedness
evidenced by the Note, any amount in excess of the maximum lawful rate of
interest permitted to be charged by applicable law. In the event Lender ever
receives, collects or applies as interest any such excess, such amount which
would be excessive interest shall be applied to reduce the unpaid principal
balance of the indebtedness evidenced by the Note. If the unpaid principal
balance of such indebtedness is paid in full, any remaining excess shall be
forthwith paid to Borrower. If any clauses or provisions herein contained
shall operate or would prospectively operate to invalidate this Mortgage,
then such clauses or provisions only shall be held for naught, as though not
herein contained and the remainder of this Mortgage shall remain operative
and in full force and effect.
22. Bankruptcy, Reorganization or Assignment. It shall be a default
hereunder if Borrower or any general partner of Borrower shall: (a) consent
to the appointment of a receiver, trustee or liquidator of all or a
substantial part of Borrower's or any general partner of Borrower's assets,
or (b) be adjudicated as bankrupt or insolvent, or file a voluntary petition
in bankruptcy, or admit in writing its inability to pay its debts as they
become due, or (c) make a general assignment for the benefit of creditors, or
(d) file a petition under or take advantage of any insolvency law, or (e)
file an answer admitting the material allegations of a petition filed against
Borrower in any bankruptcy, reorganization or insolvency proceeding or fail
to cause the dismissal of such petition within thirty (30) days after the
filing of said petition, or (f) take action for the purpose of effecting any
of the foregoing, or (g) if any order, judgment or decree shall be entered
upon an application of a creditor of Borrower or any general partner of
Borrower by a court of competent jurisdiction approving a petition seeking
appointment of a receiver or trustee of all or a substantial part of
Borrower's or such general partner's assets and such order, judgment or
decree shall continue unstayed and in effect for a period of thirty (30)
days.
23. Time is of the Essence; Monetary and Non-Monetary Defaults. It
is understood by Borrower that time is of the essence hereof in connection
with all obligations of Borrower herein and in the Note, the Assignment (as
defined in Paragraph 34) and in any of the other Loan Documents evidencing or
securing the Note.
If default be made in the payment of any installment of the Note,
whether of principal or interest, or both, or in the payment of any other
sums of money referred to herein or in the Note, promptly and fully when the
same shall be due without notice or demand from Lender to Borrower in regard
to such Monetary Default (as hereinafter defined), or in the event a breach
or default be made by Borrower in any one of the agreements, conditions and
covenants of the Note, this Mortgage, the Assignment, or any other Loan
Documents, or in the event that each and every one of said agreements,
conditions and covenants are not otherwise duly, promptly and fully
discharged or performed, and any such Non-Monetary Default (as hereinafter
defined) remains uncured for a period of thirty (30) days (or, if a period of
time greater than thirty (30) days is reasonably necessary to cure such
Non-Monetary Default, such greater period of time so long as Borrower
commences to cure such Non-Monetary Default within said thirty (30) days and
continues to prosecute the curing thereof to completion with due diligence,
as determined in the sole discretion of Lender) after written notice thereof
from Lender to Borrower has been delivered in the manner prescribed in
Paragraph 41 hereof, then, upon the occurrence of any one of such events,
Lender, at its sole option, may thereupon or thereafter declare the
indebtedness evidenced by the Note, as well as all other monies secured
hereby, including, without limitation, all Prepayment Premiums and late
payment charges, to be forthwith due and payable, whereupon the principal of
and the interest accrued on the indebted ness evidenced by the Note and all
other sums secured by this Mortgage, at the option of Lender, shall
immediately become due and payable as if all of said sums of money were
originally stipulated to be paid on such day, and thereupon, Lender may avail
itself of all rights and remedies provided by law and may prosecute a suit at
law or in equity as if all monies secured hereby had matured prior to its
institution, anything in this Mortgage or in the Note to the contrary
notwithstanding. Lender shall have no obligation to give Borrower notice of,
or any period to cure, any Monetary Default or any Incurable Default (as
hereinafter defined) prior to exercising its right, power and privilege to
accelerate the maturity of the indebtedness evidenced hereby. Notwithstanding
the foregoing, once per loan year, Borrower shall have a right to notice and
a five (5) day period to cure a monetary default. This once per loan year
right to notice and cure does not waive rights of Lender to any late payment
charge contained in the Note.
As used herein, the term "Monetary Default" shall mean any default
which can be cured by the payment of money such as, but not limited to, the
payment of principal and interest due under the Note and the payment of
taxes, assessments and insurance premiums when due as provided in this
Mortgage. As used herein, the term "Non-Monetary Default" shall mean any
default which is not a Monetary Default or an Incurable Default. As used
herein, the term "Incurable Default" shall mean (i) any voluntary or
involuntary sale, assignment, mortgaging, encumbering or transfer in
violation of the covenants contained herein; or (ii) if Borrower, or any
person or entity comprising Borrower, should make an assignment for the
benefit of creditors, become insolvent, or file a petition in bankruptcy
(including but not limited to, a petition seeking a rearrangement or
reorganization).
Lender may institute an action to foreclose this Mortgage as to the
amount so declared due and payable, and thereupon, the Property shall be sold
according to law to satisfy and pay the same together with all costs,
expenses and allowances thereof, including, without limitation, a reasonable
fee for Lender's attorneys, at all trial and appellate levels. The Property
may be sold in one parcel, several parcels or groups of parcels, and Lender
shall be entitled to bid at the sale, and, if Lender is the highest bidder
for the Property or any part or parts thereof, Lender shall be entitled to
purchase the same. The failure or omission on the part of Lender to exercise
the option for acceleration of maturity of the Note and foreclosure of this
Mortgage following any default as aforesaid or to exercise any other option
or remedy granted hereunder to Lender when entitled to do so in any one or
more instances, or the acceptance by Lender of partial payment of the
indebtedness secured hereby, whether before or subsequent to Borrower's
default hereunder, shall not constitute a waiver of any such default or the
right to exercise any such option or remedy, but such option or remedy shall
remain continuously in force. Acceleration of maturity of the Note, once
claimed hereunder by Lender, at the option of Lender, may be rescinded by
written acknowledgment to that effect by Lender, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind
such acceleration of maturity.
24. Protection of Lender's Security. At any time after default
hereunder, Lender is authorized, without notice and in its sole discretion,
to enter upon and take possession of the Property or any part thereof and to
perform any acts which Lender deems necessary or proper to conserve the
security herein intended to be provided by the Property, to operate any
business or businesses conducted thereon and to collect and receive all
rents, issues and profits thereof and therefrom, including those past due as
well as those accruing thereafter.
25. Appointment of Receiver. If, at any time after a default
hereunder, in the sole discretion of Lender, a receivership may be necessary
to protect the Property or its rents, issues, revenue, profits or proceeds,
whether before or after maturity of the indebtedness secured hereby and
whether before or at the time of or after the institution of suit to collect
such indebtedness, or to enforce this Mortgage, Lender, as a matter of strict
right and regardless of the value of the Property or the amounts due
hereunder or secured hereby, or of the solvency of any party bound for the
payment of such indebtedness, shall have the right, upon ex parte application
and without notice to anyone, and by any court having jurisdiction, to the
appointment of a receiver to take charge of, manage, preserve, protect and
operate the Property, to collect the rents, issues, revenues, profits,
proceeds and income thereof, to make all necessary and needful repairs, and
to pay all taxes, assess ments and charges against the Property and all
premiums for insurance thereon, and to do such other acts as may by such
court be authorized and directed, and after payment of the expenses of the
receivership and the management of the Property, to apply the net proceeds of
such receivership in reduction of the indebtedness secured hereby or in such
other manner as the said court shall direct, notwithstanding the fact that
the amount owing thereon may not then be due and payable or the said
indebtedness may otherwise be adequately secured. Such receivership shall, at
the option of Lender, continue until full payment of all sums hereby secured
or until title to the Property shall have passed by sale under this Mortgage.
Borrower hereby specifically waives its right to object to the appointment of
a receiver as aforesaid and hereby expressly agrees that such appointment
shall be made as an admitted equity and as a matter of absolute right to
Lender.
26. Rights and Remedies Cumulative; Forbearance Not a Waiver. The
rights and remedies herein provided are cumulative and Lender, as the holder
of the Note and of every other obligation secured hereby, may recover
judgment thereon, issue execution therefor and resort to every other right or
remedy available at law or in equity, without first exhausting any right or
remedy available to Lender and without affecting or impairing the security of
any right or remedy afforded hereby, and no enumeration of special rights or
powers by any provisions hereof shall be construed to limit any grant of
general rights or powers, or to take away or limit any and all rights granted
to or vested in Lender by law, and Borrower further agrees that no delay or
omission on the part of Lender to exercise any rights or powers accruing to
it hereunder shall impair any such right or power or shall be construed to be
a waiver of any such event of default hereunder or an acquiescence therein;
and every right, power and remedy granted herein or by law to Lender may be
exercised from time to time as often as may be deemed expedient by Lender.
27. Modification Not an Impairment of Security. Lender, without
notice and without regard to the consideration, if any, paid therefor, and
notwithstanding the existence at that time of any inferior mortgages or other
liens thereon, may release any part of the security described herein or may
release any person or entity liable for any indebtedness secured hereby
without in any way affecting the priority of this Mortgage, to the full
extent of the indebtedness remaining unpaid hereunder, upon any part of the
security not expressly released. Lender may, at its option and within its
sole discretion, also agree with any party obligated on said indebtedness, or
having any interest in the security described herein, to extend the time for
payment of any part or all of the indebtedness secured hereby, and such
agreement shall not, in any way, release or impair this Mortgage, but shall
extend the same as against the title of all parties having any interest in
said security, which interest is subject to this Mortgage.
28. Property Management/Leasing. The exclusive manager of the
Property shall be Borrower or such other manager as may be first approved in
writing by Lender. The exclusive leasing agent of the Property, if other than
the foregoing party, shall be first approved in writing by Lender. The
governing management and leasing contracts (or in the absence of any such
written contract, a letter so stating and further identifying the name of the
person or entity charged with the responsibility for managing and/or leasing
the Property) shall be satisfactory to and subject to the written approval of
Lender throughout the term of the indebtedness secured hereby. Upon default
in either of these requirements, then the whole of the indebtedness hereby
secured shall, at the election of Lender, become immediately due and payable,
together with any default premium and late payment charges required by the
Note, and Lender shall be entitled to exercise any or all remedies provided
or referenced in this Mortgage.
29. Modification Not a Waiver. In the event Lender: (a) releases, as
aforesaid, any part of the security described herein or any person or entity
liable for any indebtedness secured hereby, or (b) grants an extension of
time for the payment of the Note, or (c) takes other or additional security
for the payment of the Note, or (d) waives or fails to exercise any rights
granted herein or in the Note, or any other Loan Document, any said act or
omission shall not release Borrower, subsequent purchasers of the Property or
any part thereof, or makers, sureties, endorsers or guarantors of the Note,
if any, from any obligation or any covenant of this Mortgage or of the Note
or of any of the other Loan Documents, nor preclude Lender from exercising
any right, power or privilege herein granted or intended to be granted in the
event of any other default then made, or any subsequent default.
30. Transfer of Property or Controlling Interest in Borrower;
Assumption. Except as set forth in Paragraph 36 (b) hereof, the sale,
transfer, assignment or conveyance of all or any portion of the Property or
the transfer, assignment or conveyance of a controlling interest in Borrower,
whether voluntarily or by operation of law, without the prior written consent
of Lender, shall constitute a default under the terms of this Mortgage and
entitle Lender, at its sole option, to accelerate all sums due on the Note
together with any Prepayment Premiums to the extent permitted by the laws of
the State of Florida, late payment charges, or any other amounts secured
hereby. Lender may, however, elect to waive the option to accelerate granted
hereunder if, prior to any such sale, transfer, assignment or conveyance of
the Property, the following conditions shall be fully satisfied: (a) Lender
acknowledges in writing that, in its sole discretion, the creditworthiness of
the proposed transferee and the ability and experience of the proposed
transferee to operate the Property are satisfactory to Lender, and (b) Lender
and the proposed transferee shall enter into an agreement in writing that (i)
the interest payable on the indebtedness secured hereby shall be at such rate
as Lender shall determine, (ii) the repayment schedule as set forth in the
Note shall be modified by Lender, in its sole discretion, to initiate
amortization or modify the existing amortization schedule in order to
amortize the then remaining unpaid principal balance of the Note secured
hereby over a period of time as determined by Lender in its sole discretion
without a change in the maturity date of the Note, and (iii) the proposed
transferee shall assume in writing all obligations of Borrower under the
Note, this Mortgage and the other Loan Documents and an assumption fee to be
determined by Lender may be charged by Lender in its sole discretion, (c)
Lender shall receive for its review and approval copies of all transfer
documents, and (d) Borrower or the transferee shall pay all costs and
expenses in connection with such transfer and assumption, including, without
limitation, all fees and expenses incurred by Lender. Borrower and any
subsequent owner of the Property or any portion thereof shall do all things
necessary to preserve and keep in full force and effect its and their
existence, franchises, rights and privileges as a corporation or partnership,
as the case may be, under the laws of the state of its formation and its
right to own property and transact business in the State of Florida. It shall
be a default hereunder if Borrower or any subsequent owner of the Property or
any portion thereof shall amend, modify, transfer, assign or cancel the
partnership agreement, certificate of partnership or articles of
incorporation, as the case may be, of Borrower or such subsequent owner and,
in the reasonable determination of Lender, such amendment, modification,
transfer, assignment or cancellation shall have a material adverse effect on
Lender, the Property or the security value thereof. Borrower or such
subsequent owner shall provide Lender with copies of any amendment to its
partnership agreement, certificate of partnership or articles of
incorporation, as the case may be, no later than thirty (30) days after the
effective date of such amendment so that Lender may, in its sole discretion,
determine whether such amendment adversely affects Lender, the Property or
the security value thereof. In the event the ownership of the Property, or
any part thereof, shall become vested in a person or entity other than
Borrower, whether with or without the prior written consent of Lender, Lender
may, without notice to Borrower, deal with such successor or successors in
interest with reference to the Property, this Mortgage and the Note secured
hereby in the same manner and to the same extent as with Borrower without in
any way vitiating or discharging Borrower's liability hereunder or under the
Note. No sale, transfer or conveyance of the Property, no forbearance on the
part of Lender and no extension of the time for the payment of the debt
hereby secured given by Lender shall operate to release, discharge, modify,
change, or affect the original liability of Borrower, either in whole or in
part, unless expressly set forth in writing executed by Lender.
Notwithstanding anything contained herein to the contrary, Borrower hereby
waives any right it now has or may hereafter have to require Lender to prove
an impairment of its security as a condition to exercise Lender's rights
under this Paragraph 30.
Notwithstanding anything contained in this Paragraph 30 to the
contrary:
A. As long as no default, or event which, with notice or the
passage of time or both, could result in a default, has
occurred hereunder or under the Note, Lender shall permit one
(1) bona fide arm's length transfer of the Property to another
borrowing entity without a change in loan terms; provided,
however, that no such transfer shall be valid or permitted
hereunder unless: (i) Lender receives at least sixty (60) days
prior written notice of such proposed transfer, (ii) such
proposed transferee has been approved in writing by Lender
(taking into consideration such factors as transferee's
creditworthiness, business experience, financial condition,
and managerial capabilities), (iii) Lender is paid a transfer
fee in the amount of (a) two percent (2%) of the outstanding
principal balance of the Note (if such balance is less than
THREE MILLION AND NO/100 DOLLARS ($3,000,000.00)), (b) one and
one-half percent (1.5%) of the outstanding principal balance
of the Note (if such balance is at least THREE MILLION AND
NO/100 DOLLARS ($3,000,000.00) but less than SIX MILLION AND
NO/100 DOLLARS ($6,000,000.00)), or (c) one percent (1%) of
the outstanding principal balance of the Note (if such balance
is SIX MILLION AND NO/100 DOLLARS ($6,000,000.00) or more);
provided, however that nothing herein shall be deemed to
obligate Lender to make any additional disbursements to
Borrower hereunder, (iv) Borrower pays all fees and expenses
incurred by Lender in connection with such transfer and
assumption, including, without limitation, inspection and
investigation fees, title insurance charges, documentary stamp
taxes, recording fees, and Reasonable Attorneys' Fees (as
hereinafter defined), (v) such proposed transferee assumes in
writing all obligations of Borrower under the Note, this
Mortgage and the other Loan Documents, with the same degree of
liability as Borrower; and (vi) Lender approves the management
agreement and the management company to be employed by the
proposed transferee. This one time right to transfer shall
apply to the Borrower named herein and not to any other owner
of the Property.
Any transfer of all or any portion of the Property which does not
strictly comply with the terms and conditions of the foregoing shall be a
default hereunder and shall entitle Lender to exercise all rights and
remedies provided in this Mortgage.
31. Further Encumbrance Prohibited; Subrogation. So long as the Note
remains unpaid, Borrower shall neither voluntarily nor involuntarily permit
the Property or any part thereof to become subject to any secondary lien,
mortgage, security interest or encumbrance of any kind whatsoever without the
prior written consent of Lender, and the imposition of any such secondary
lien, mortgage, security interest or encumbrance shall constitute an event of
default hereunder and entitle Lender, at its sole option, to declare all sums
due on account of the Note to be and become immediately due and payable. In
the event that Lender shall hereafter give its written consent to the
imposition of any such secondary lien, mortgage, security interest or other
encumbrance upon the Property, Lender, at its sole option, shall be entitled
to accelerate the maturity of the indebtedness secured hereby and exercise
any and all remedies provided and available to Lender hereunder in the event
that the holder of any such secondary lien or encumbrance shall institute
foreclosure or other proceedings to enforce the same; it being understood and
agreed that a default under any instrument or document evidencing, securing
or secured by any such secondary lien or encumbrance shall be and constitute
an event of default hereunder. In the event all or any portion of the
proceeds of the loan secured hereby are used for the purpose of retiring debt
or debts secured by prior liens on the Property, Lender shall be subrogated
to the rights and lien priority of the holder of the lien so discharged.
32. Conveyance of Mineral Rights Prohibited. Borrower agrees that
the making of any oil, gas or mineral lease or the sale or conveyance of any
mineral interest or right to explore for minerals under, through or upon the
Property would impair the value of the Property securing the Note, and that
Borrower shall have no right, power or authority to lease the Property, or
any part thereof, for oil, gas or other mineral purposes, or to grant, assign
or convey any mineral interest of any nature, or the right to explore for
oil, gas and other minerals, without first obtaining from Lender express
written permission therefor, which permission shall not be valid until
recorded among the Public Records of Polk County, Florida. Borrower further
agrees that if Borrower shall make, execute, or enter into any such lease or
attempt to grant any such mineral rights without such prior written
permission of Lender, then Lender shall have the option, without notice, to
declare the same to be a default hereunder and to declare the indebtedness
hereby secured immediately due and payable. Whether or not Lender shall
consent to such lease or grant of mineral rights, Lender shall receive the
entire consideration to be paid for such lease or grant of mineral rights,
with the same to be applied to the indebtedness hereby secured,
notwithstanding the fact that the amount owing thereon may not be due and
payable or the said indebtedness may be otherwise adequately secured;
provided, however, that the acceptance of such consideration shall in no way
impair the lien of this Mortgage on the Property.
33. Estoppel Certification by Borrower. Borrower, upon request
therefor made either personally or by mail, shall certify in writing to
Lender (or any party designated by Lender) in form satisfactory to Lender the
amount of principal and interest then outstanding under the terms of the Note
and any other sums owing on account of this Mortgage or the other Loan
Documents, and whether any offsets or defenses exist against the Mortgage
debt. Such certification shall be made by Borrower within ten (10) days if
the request is made personally, or within twenty (20) days if the request is
made by mail.
34. Cross-Default. The Note secured hereby is also secured by the
terms, conditions and provisions of the Assignment of Leases, Rents and
Profits from Borrower to Lender recorded among the Public Records of Polk
County, Florida (hereinafter referred to as the "Assignment") and,
additionally, may be secured by contracts or agreements of guaranty or other
security instruments from Borrower to Lender. The terms, conditions and
provisions of each such security instrument shall be considered a part hereof
as fully as if set forth herein verbatim. Any default under this Mortgage or
the Note or any of the other Loan Documents shall constitute an event of
default under the aforesaid Assignment and any other security instruments,
and any default under the Assignment or other security instruments shall
likewise constitute a default hereunder and under the Note secured hereby.
Notwithstanding the foregoing, the enforcement or attempted enforcement of
this Mortgage or any other security instrument now or hereafter held by
Lender shall not prejudice or in any manner affect the right of Lender to
enforce any other Loan Document; it being understood and agreed that Lender
shall be entitled to enforce this Mortgage and any other Loan Document now or
hereafter held by it in such order and manner as Lender, in its sole
discretion, shall determine.
35. Examination of Borrower's Records. Borrower will maintain
complete and accurate books and records showing in detail the income and
expenses of the Property, and will permit Lender and its representatives to
examine said books and records and all supporting vouchers and data during
normal business hours and from time to time upon request by Lender, in such
place as such books and records are customarily kept, and will furnish to
Lender, within one hundred twenty (120) days after the close of each calendar
year, annual statements (a balance sheet, income statement, certified rent
roll, and current annual sales figures for all Major Tenants if required
under their respective leases or otherwise available) for Borrower and the
Property prepared in accordance with generally accepted accounting principles
and certified by Borrower to be true and correct and showing in detail all
income derived from and expenses incurred in connection with the ownership of
the Property. In the event Borrower fails to provide such statements to
Lender within the time prescribed above, Borrower shall pay Lender the sum of
TWO HUNDRED AND 00/100 DOLLARS ($200.00) for each successive month for which
statements are delinquent. In the event of default hereunder, Lender shall
have the right to require that said financial statements be audited and
certified by a certified public accountant acceptable to Lender, at the sole
cost and expense of Borrower.
36. Alteration, Removal and Change in Use of Property Prohibited.
Except for alterations made by K Mart Corporation, a Michigan corporation (K
Mart) pursuant to that certain lease between K Mart and N. Lake Plaza, a
Michigan partnership dated August 7, 1985, as assigned to Borrower dated by
that certain Assignment and Assumption Agreement dated April 22, 1994,
Borrower covenants and agrees to permit or suffer none of the following
without the prior written consent of Lender:
(a) Any structural alteration of, or addition to, the
Improvements now or hereafter situated upon the Real
Property or the addition of any new buildings or other
structure(s) thereto; or
(b) The removal, transfer, sale or lease of the Property,
except that the renewal, replacement or substitution of
fixtures, equipment, machinery, apparatus and articles of
personal property (replacement or substituted items must be
of like or better quality than the removed items in their
original condition) encumbered hereby may be made in the
normal course of business; or
(c) The use of any of the Improvements now or hereafter
situated on the Real Property for any purpose other than as
a retail project and related facilities.
37. Future Advances Secured. This Mortgage shall secure not only
existing indebtedness, but also future advances, whether such advances are
obligatory or to be made at the option of Lender, as are made within twenty
(20) years from the date hereof. Upon request of Borrower, and at Lender's
option prior to release of this Mortgage, Lender may make future advances to
Borrower. All future advances with interest thereon shall be secured by this
Mortgage to the same extent as if such future advances were made on the date
of the execution of this Mortgage unless the parties shall agree otherwise in
writing, but the total secured indebtedness shall not exceed at any one time
a maximum principal amount equal to double the face amount of the Note plus
interest, and costs of collection including court costs and Reasonable
Attorney's Fees. Any advances or disbursements made for the benefit or
protection of or the payment of taxes, assessments, levies or insurance upon
the Property, with interest on such disbursements as provided herein shall be
added to the principal balance of the Note and collected as part thereof. The
filing of any notice limiting the maximum amount that may be secured by this
Mortgage pursuant to Florida Statutes Section 697.04 or otherwise shall be
and constitute a default under this Mortgage.
38. Effect of Security Agreement. Borrower does hereby grant and
this Mortgage is and shall be deemed to create, grant, give and convey a
mortgage of, a lien and encumbrance upon, and a present security interest in
both real and personal property, including all improvements, goods, chattels,
furniture, furnishings, fixtures, equipment, apparatus, appliances and other
items of tangible or intangible personal property, hereinabove particularly
or generally described and conveyed, whether now or hereafter affixed to,
located upon, necessary for or used or useful, either directly or indirectly,
in connection with the operation of the Property as a retail project, and
this Mortgage shall also serve as a "security agreement" within the meaning
of that term as used in the Uniform Commercial Code as adopted and in force
from time to time in the State of Florida, and shall be operative and
effective as a security agreement in addition to, and not in substitution
for, any other security agreement executed by Borrower in connection with the
Note secured hereby. Borrower agrees to and shall, upon the request of
Lender, execute and deliver to Lender, in form and content satisfactory to
Lender, such financing statements, descriptions of property and such further
assurances as Lender, in its sole discretion, may from time to time consider
necessary to create, perfect, continue and preserve the lien and encumbrances
hereof and the security interest granted herein upon and in such real and
personal property and fixtures described herein, including all buildings,
improvements, goods, chattels, furniture, furnishings, fixtures, equipment,
apparatus, appliances, and other items of tangible and intangible personal
property herein specifically or generally described and intended to be the
subject of the security interest, lien and encumbrance hereby created,
granted and conveyed. Without the prior written consent of Lender, Borrower
shall not create or suffer to be created, pursuant to the Uniform Commercial
Code, any other security interest in such real and personal property and
fixtures described herein. Upon the occurrence of a default hereunder or
Borrower's breach of any other covenants or agreements between the parties
entered into in conjunction herewith, Lender shall have the remedies of a
secured party under the Uniform Commercial Code and, at Lender's option, the
remedies provided for in this Mortgage. Lender, at the expense of Borrower,
may or shall cause such statements, descriptions and assurances, as herein
provided in this Paragraph 38, and this Mortgage to be recorded and
re-recorded, filed and refiled, at such times and in such places as may be
required or permitted by law to so create, perfect and preserve the lien and
encumbrance hereof upon all of the Property.
39. Terms of Commitment Survive Closing. The terms and provisions of
the Application/Contract for Mortgage Loan between Lender and Borrower dated
March 12, 1999, as accepted by Lender on March 17, 1999, and any subsequent
amendments thereto (hereinafter referred to as the "Commitment") are
incorporated herein by reference. All terms and conditions of the Commitment
not expressly set forth in this Mortgage, the Note, and any of the other Loan
Documents additionally securing the Note shall survive the closing hereof and
remain in full force and effect. In the event any conflict exists between the
terms, conditions and provisions of the Commitment and the Loan Documents,
the terms, conditions and provisions of the Loan Documents shall prevail.
40. Successors and Assigns; Terminology. The provisions hereof shall
be binding upon Borrower, its successors and assigns, and inure to the
benefit of Lender, its successors and assigns. Where more than one Borrower
is named herein, the obligations and liabilities of said Borrower shall be
joint and several. Wherever used in this Mortgage, unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
the word "Borrower" shall mean Borrower and/or any subsequent owner or owners
of the Property, the word "Lender" shall mean Lender or any subsequent holder
or holders of this Mortgage, the word "Note" shall mean Note(s) secured by
this Mortgage, the word "person" shall mean an individual, trustee, trust,
corporation, partnership or unincorporated association and the phrase
"successors and assigns" includes the personal representatives and heirs of
any individual. As used herein, the phrase "Reasonable Attorneys' Fees" shall
mean fees charged by attorneys selected by Lender based upon such attorneys'
then prevailing hourly rates as opposed to any statutory presumption
specified by any statute then in effect in the State of Florida.
41. Notices. All notices hereunder shall be deemed to have been duly
given if mailed by United States registered or certified mail, with return
receipt requested, postage prepaid, or by nationally recognized overnight
carrier, to the parties at the following addresses (or at such other
addresses as shall be given in writing by any party to the others), and shall
be deemed complete upon any such mailing:
TO Borrower: Agree Limited Partnership
31850 Northwestern Highway
Farmington Hills, Michigan 48334
Attention: Richard Agree
TO Lender: NATIONWIDE LIFE INSURANCE COMPANY
One Nationwide Plaza
Columbus, Ohio 43215-2220
Attention: Real Estate Investment
Department, 34T
42. Governing Law. This Mortgage is to be governed by and construed
in accordance with the laws of the State of Florida and, if controlling, by
the laws of the United States.
43. Rights of Lender Cumulative. The rights of Lender arising under
the clauses and covenants contained in this Mortgage shall be separate,
distinct and cumulative and none of them shall be in exclusion of the others;
and no act of Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provisions, anything
herein or otherwise to the contrary notwithstanding.
44. Modifications. This Mortgage cannot be changed, altered, amended
or modified except by an agreement in writing and in recordable form,
executed by both Borrower and Lender.
45. Exculpation. Notwithstanding anything contained herein to the
contrary, the liability of Borrower is subject to the limited recourse
provisions contained in the exculpation section of the Note, which are
incorporated herein and made a part hereof by reference as if fully set forth
herein.
46. Full Recourse Notwithstanding any provisions in this Mortgage to
the contrary including without limitation, the provisions set forth in the
section captioned "Exculpation" hereinabove, Borrower and the general
partners of Borrower shall be personally liable, jointly and severally, for
the entire indebtedness secured by this Mortgage (including all principal,
interest and other charges) in the event Borrower (i) violates the covenant
governing the placing of subordinate financing on the Property as set forth
in Paragraph 31 of this Mortgage, or (ii) violates the covenant restricting
transfers of the Property or transfer of ownership interests in Borrower as
set forth in Paragraph 30 of this Mortgage.
47. Captions. The captions set forth at the beginning of the various
paragraphs of this Mortgage are for convenience only and shall not be used to
interpret or construe the provisions of this Mortgage.
IN WITNESS WHEREOF, Borrower has caused these presents to
be executed as of the day and year first above written.
Signed, sealed and delivered
in the presence of: AGREE LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Agree Realty Corporation, a Maryland
corporation, general partner
By: /s/ Richard Agree
----------------------
Richard Agree, President
Name: Patricia L. Chapman
----------------------------
/s/ Patricia L. Chapman
----------------------------
(CORPORATE SEAL)
/s/ Leon M. Schurgin
----------------------------
Name: Leon M. Schurgin
STATE OF Michigan
COUNTY OF Michigan
The foregoing instrument was acknowledged before me this day of
March 26th, 1999 by Richard Agree, as President of Agree Realty Corporation,
a Maryland corporation as general partner of AGREE LIMITED PARTNERSHIP, a
Delaware limited partnership, on behalf of the partnership. He/she is
personally known to me or has produced as identification.
/s/ Patricia L. Chapman
-----------------------
Notary Public Patricia L. Chapman
Name:
Commission No.:
My Commission Expires:
(SEAL)
NATIONWIDE LIFE INSURANCE
COMPANY, an Ohio corporation
By: /s/ Robert H. McNaghten
/s/ Sue Crego ------------------------
- --------------
Name:Sue Crego Name: Robert H. McNaghten,Vice President
----------- -------------------
Vice President
/s/ Louise Brown
- ----------------
Name: Louise Brown (CORPORATE SEAL)
- ------------------
STATE OF OHIO
COUNTY OF FRANKLIN
The foregoing instrument was acknowledged before me this 25 day of
March, 1999 by Robert H. McNaghten , as Vice President of NATIONWIDE LIFE
INSURANCE COMPANY, an Ohio corporation, on behalf of the corporation. He/she
is personally known to me or has produced
as identification.
/s/ Sue Ann Crego
-----------------
Notary Public
Name: Sue Ann Crego
Commission No.:
My Commission Expires:
(SEAL)
Exhibit "A"
Legal Description
From the Northwest corner Section 36, Township 27 South, [text omitted] 23
East, Polk County, Florida, run South 89 deg [text omitted] 35 sec East,
114.68 feet to the East line of U.S. 98; run thence South 0 deg 13 min 57 sec
West along said East line of U.S. 98, 943.52 feet to the point of beginning
from the point of beginning; run thence South 89 deg 46 min 03 sec East 300
feet to a point; thence North 0 deg 13 min 57 sec East 202.84 feet to a point
in the South line of a proposed Boulevard; thence Eastwardly through a curve
to the right having a central angle of 4 deg 09 min 23 sec, a radius of
977.75 feet an arc length of 70.92 feet to a point of reverse curve; thence
through a curve to the left having a central angle of 22 deg 01 min 28 sec, a
radius of 1077.75 feet an arc length of 414.29 feet to a point; thence South
89 deg 46 min 03 sec East 429.19 feet to a point in said South right of way;
thence South 0 deg 13 min 57 sec West 674.37 feet to a point; thence North 89
deg 46 min 03 sec West 1246.50 feet to a point in the East line of U.S. 98;
thence along said East line of U.S. 98 through a curve to the left having a
central angle of 0 deg 52 min 33 sec a radius of 4244.69 feet, an arc length
of 64.89 feet to a point; thence North 0 deg 13 min 57 sec East along said
East right of way 44 feet; thence South 89 deg 46 min 03 sec East 46 feet to
a point; thence North 0 deg 13 min 57 sec East along said East right of way
465.49 feet to the point of beginning:
LESS AND EXCEPT
A parcel of land in Section 36, Township 27 South, Range 23 East, Polk
County, Florida, being more particularly described as follows: For a point of
reference, commence at the Northwest corner of "Cambridge on the Green"; as
recorded in Plat Book 75, page 27 of the public records of Polk County,
Florida; thence South 0 deg 13 min 57 sec West along the West line of said
"Cambridge on the Green", and the Southerly prolongation of said West line a
distance of 674.37 feet; thence North 89 deg 46 min 03 sec West a distance of
1046.50 feet to the point of beginning of the herein described parcel; thence
North 0 deg 13 min 57 sec East, a distance of 233.00 feet; thence South 73
deg 02 min 59 sec West a distance of 132.41 feet; thence North 89 deg 46 min
03 sec West a distance of 27.00 feet to the East right of way line of U.S.
Highway 98; thence South 0 deg 13 min 57 sec West along said East right of
way line a distance of 85.00 feet; thence continue along said East right of
way line North 89 deg 46 min 03 sec West, a distance of 46.00 feet; thence
continue along said East right of way line, South 0 deg 13 min 57 sec West, a
distance of 44.00 feet to a point of tangency with a curve concave Westerly
having a radius of 4244.69 feet; thence Southerly along the arc of said
curve, through a central angle of 0 deg 52 min 33 sec an arc distance of
64.89 feet; thence South 89 deg 46 min 03 sec East, a distance of 200.00 feet
to the point of beginning of the herein described parcel.
ALSO LESS AND EXCEPT Commence at the Southeast corner of Wedgewood Estates
Boulevard, as recorded in Plat Book 73, page 2, public records of Polk
County, Florida; thence North 89 deg 46 min 03 sec West, along the South
right of way line of said Wedgewood Estates Boulevard, a distance of 429.19
feet to a point of tangency with a curve, concave Northerly having a radius
of 1077.75 feet; thence Westerly along the arc of said curve, through a
central angle of 12 deg 35 min 43 sec an arc distance of 236.91 feet to the
point of beginning of the herein described parcel; thence continue Westerly
along said right of way line and along said curve, through a central angle of
9 deg 25 min 45 sec, an arc distance of 177.37 feet to a point of reverse
curvature with a curve concave Southerly having a radius of 977.75 feet;
thence Westerly along the arc of said curve through a central angle of 4 deg
09 min 23 sec an arc distance of 70.92 feet; thence South 0 deg 13 min 57 sec
West a distance of 202.84 feet; thence South 89 deg 46 min 03 sec East a
distance of 230.00 feet; thence North 0 deg 13 min 57 sec East a distance of
100.00 feet; thence North 12 deg 49 min 39 sec East a distance of 26.57 feet
to the point of beginning.
POLK OR BK 04215 PG 0272
PROJECT LOAN AGREEMENT
between
WILMINGTON TRUST COMPANY
not in its individual capacity,
but solely as Owner Trustee, as Lender,
and
AGREE-COLUMBIA CROSSING PROJECT, L.L.C.
---------
Dated as of April 30, 1999
---------
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . 1
SECTION 1. DEFINITIONS . . . . . . . . . . 1
1.1. Defined Terms............. . . . . . . . . . 1
1.2 Construction ................................ 12
1.3 Accounting Principles . . . . . . . . . . 13
SECTION 2. THE PROJECT LOAN . . . . . . 14
2.1 Project Loan Commitment. . . . . . . . . 14
2.2 Determination of Amounts of Project Loan Advances 14
2.3 Construction Budget Evaluation . . . . . . . . 14
2.4 Reduction of Project Loan Conunitment . . . . . . . 15
2.5 Project Loan Advance Requests. . . . . . 15
2.6 Project Loan Advances . . . . . . . . . 16
2.7 Notes . . . . . . . . . . . . . . . . . . . . . . . 16
2.8 Interest Rate on Project Loan Advances . . . . . . 16
2.9 Maximum Interest Rate . . . . . . . . . . . . . . . 16
2.10 Use of Proceeds . . . . . . . . . . . . . . . . . . 16
2.11 Advances to Pay Interest . . . . . . . . . . . . . . 16
SECTION 3. PAYMENTS. . . . . . . . . . . . . . . . .. 16
3.1 Payments . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Interest Payment Dates . . . . . . . . . . . . . . 17
3.3 Prepayments . . . . . . . . . . . . . . . . . . . . 17
3.4 Indemnity . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES 18
4.1 Existence; Compliance with Law . . . . . 18
4.2 Power, Authorization; Enforceable Obligations . . . . 19
4.3 No Litigation . . . . . . . . . . . . . . . . . . . 19
4.4 Consents, Approvals, Authorizations, Etc . . . . . . 19
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . 19
4.6 Compliance with Building Codes, Zoning Laws, Etc . 20
4.7 Ownership of Property; Liens . . . . . . 20
4.8 No Default . . . . . . . . . . . . . . . . . . . . 20
4.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . 20
4.10 Availability of Utilities . . . . . . . . . . . . . 20
4.11 Permits, Etc . . . . . . . . . . . . . . . . . . . . 20
4.12 Financial Statements . . . . . . . . . . . . . . . . . 20
4.13 Federal Regulations . . . . . . . . . . . . . . . . . 21
4.14 Investment Company Act; Other Regulations . . . . . . 21
4.15 Environmental Matters . . . . . . . . . . . . . . . 21
4.16 Regulation H . . . . . . . . . . . . . . . . . . . . 22
4.17 No other Assets . . . . . . . . . . . . . . . . . . . 22
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . 22
5.1 Construction . . . . . . . . . . . . . . . . . . . . 22
5.2 Correction of Work . . . . . . . . . . . . . . . . . 23
5.3 No Encroachments . . . . . . . . . . . . . . . . . . 23
5.4 Certain Notices. . . . . . . . . . . . . . . . . . . . 23
5.5 Indemnification. . . . . . . . . . . . . . . . . . . . 24
5.6 Construction Schedule. . . . . . . . . . . . . . . . . 24
5.7 Expenses . . . . . . . . . . . . . . . . . . . . . . 24
5.8 Conduct of Business and Maintenance of Existence . . 24
5.9 Inspection of Property; Books and Records; Discussions 24
5.10 Compliance with Project Loan Documents . . . . . . . . 25
5.11 Further Assurances . . . . . . . . . . . . . . . . . . 25
5.12 Single Purpose Entity; Separateness . . . . . . . . . 25
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . 27
6.1 Changes in Plans and Specifications . . . . . . . . 27
6.2 Change Orders . . . . . . . . . . . . . . . . . . 27
6.3 Changes in Agreements . . . . . . . . . . . . . . . 28
6.4 Limitation on Liens . . . . . . . . . . . . . . . . 28
6.5 Limitation on Contingent Obligations . . . . . . . . 28
6.6 Other Activities . . . . . . . . . . . . . . . . . 28
6.7 Ownership of Properties, Indebtedness . . . . . . . 28
6.8 Disposition of Assets . . . . . . . . . . . . . . . 29
6.9 Discharge of Liens . . . . . . . . . . . . . . . . . 29
6.10 Change in Ownership . . . . . . . . . . . . . . . . 29
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE . . 29
7.1 Closing Documents . . . . . . . . . . . . . . . . . . 29
7.2 Accounting . . . . . . . . . . . . . . . . . . . . . . 32
7.3 Representations and Warranties . . . . . . . . . . 32
7.4 No Default or Event of Default . . . . . . . . . . . . 32
7.5 Additional Matters . . . . . . . . . . . . . . . . . 32
7.6 Environmental Audit . . . . . . . . . . . . . . . . . 33
7.7 Developer Equity . . . . . . . . . . . . . . . . . . 33
7.8 Acquisition of Property . . . . . . . . . . . . . . . 33
SECTION 8. CONDITIONS PRECEDENT TO
SUBSEQUENT ADVANCES . . . . . . . . . . 33
8.1 AU Subsequent Advances. . . . . . . . . . . . . . . 33
8.2 Completion of Improvements . . . . . . . 35
SECTION 9. MATTERS RELATING TO PAYMENTS
AND COLLATERAL . . . . . . . . . . . . . . 36
9.1 The Account . . . . . . . . . . . . . . . . . . . 36
9.2 Proceeds of Collateral; Proceeds Remaining in Account 38
9.3 Certain Remedial Matters . . . . . . . . . . . . . . 39
9.4 Release of the Property, Etc . . . . . . . . . . . . 39
SECTION 10. EVENTS OF DEFAULT . . . . . . . . . . . . . 40
10.1 Events of Default . . . . . . . . . . . . . . . . . 40
10.2 Lender's Right to Apply Project Loan Proceeds . . . 42
10.3 Lender's Right to Complete . . . . . . . . . . . . . 42
10.4 Power of Attorney . . . . . . . . . . . . . . . . . 43
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . 43
11.1 No Waivers . . . . . . . . . . . . . . . . . . . . . 43
11.2 Lender and Lessee as Sole Beneficiaries . . . . . . . 43
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 44
11.4 Modifications . . . . . . . . . . . . . . . . . . . . 45
11.5 Rights Cumulative . . . . . . . . . . . . . . . . . . 45
11.6 Schedules . . . . . . . . . . . . . . . . . . . . . . 45
11.7 Governing Law . . . . . . . . . . . . . . . . . . . . 45
11.8 Waiver of Jury Trial, Submission to Jurisdiction . . 45
11.9 Captions . . . . . . . . . . . . . . . . . . . . . . 46
11.10 Obligations Non-Recourse. . . . . . . . . . . . . . . 46
EXHIBITS
EXHIBIT A LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B SITE PLAN
EXHIBIT C CONSTRUCTION BUDGET
(NOTE.- Documents referred to in Project Loan Agreement, as being executed on
date of execution of Project Loan Agreement:
1. Lease and Lease Supplement, if applicable
2. Mortgage or Deed of Trust
3. Project Loan Note
4. Assignment of Leases and Rents
5. Development Agreement
6. Development Agency Agreement
7. Assignment of Development Agency Agreement
8. Completion Guarantee (Borders)
9. Organizational Certificate of Borrower
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PROJECT LOAN AGREEMENT
(Columbia II, Maryland)
PROJECT LOAN AGREEMENT, dated as of April 30, 1999 (this
"Agreement"), between WILMINGTON TRUST COMPANY, not in its individual
capacity, but solely as Owner Trustee, having an office at 1100 North Market
Street, Wilmington, Delaware 19890 ("Lender"), and AGREE-COLUMBIA CROSSING
PROJECT, L.L.C., a Delaware limited liability company, having its principal
office at 31850 Northwestern Highway, Farmington Hills, Michigan 48334
("Borrower").
PRELIMINARY STATEMENT
Borrower is the owner of the land located in the City of Columbia,
County of Howard and State of Maryland, and more particularly described in
Exhibit A attached hereto and incorporated herein by reference (the "Land").
Borrower wishes to construct and equip on the Land a building containing
approximately 28,000 square feet of rentable space in the approximate
location depicted on Exhibit B attached hereto and incorporated herein by
reference and any other improvements to be constructed pursuant to the
Development Agreement. In order to acquire the Land and construct the
Improvements, Borrower has requested Lender to provide to Borrower a loan in
the aggregate principal amount of $4,456,954.65 (the "Project Loan").
Subject to the terms and conditions of this Agreement, Lender has
agreed to make the Project Loan to Borrower.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement the following
terms shall have the meaning given to such term below:
"Account" shall have the meaning specified in Section 9.1.
"Affiliate" with respect to any Person, any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any
class of the voting or other equity interests of such Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. Control,
as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities,
by contract or otherwise, including the power to elect a majority of the
directors or trustees of a corporation or trust, as the case may be.
"Agent" shall mean Bankers Trust Company, a New York banking
corporation.
"Agreement" shall mean this Project Loan Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
"Allocated Interest" shall mean, as of any Interest Payment Date
during the Construction Period, the amount of interest due and payable on
such date with respect to the Project Loan.
"Architect" shall mean such architect or architects as may be
engaged by Borrower from time to time in connection with the Improvements
with Lender's prior written approval.
"Architect's Agreement" shall mean any agreements entered into
between Borrower and the Architect providing for architectural services in
connection with the construction of the Improvements, as it may be amended,
supplemented or otherwise modified from time to time with Lender's prior
written approval.
"Assignment of Development Agency Agreement" shall mean the
Assignment of Development Agency Agreement, dated as of the date hereof made
by Borrower in favor of Lender.
"Assignment of Lease" shall mean the Assignment of Leases and Rents,
dated as of the date hereof made by Borrower in favor of Lender.
"Available Project Loan Commitment" shall mean, at any particular
time, an amount equal to the difference between (a) the amount of the Project
Loan and (b) the aggregate amount of all Project Loan Advances made pursuant
to this Agreement.
"Basic Rent" shall mean, the sum of (i) the Project Loan Basic Rent
and (ii) the Developer Basic Rent, calculated as of the applicable date on
which Basic Rent is due.
"Beneficial Owner" shall have the meaning specified in Section 5.12.
"Borrowing Certificate" shall mean a certificate executed by a
Responsible Officer, delivered to Lender on each Borrowing Date, satisfactory
in form and substance to Lender.
"Borrowing Date" shall mean, with respect to any Project Loan
Advance, the date for the making thereof, which shall be a Business Day.
"Business Day" shall mean any day other than a Saturday or Sunday or
a legal holiday on which commercial banks are authorized or required to be
closed for business in New York, New York.
"Collateral" shall mean all assets of Borrower, now owned or
hereafter acquired, upon which a Lien is purported to be created by the
Security Documents.
"Completion" or "Completed" shall mean, with respect to any
Improvements, such time as substantial completion of such Improvements has
been achieved in accordance with the Plans and Specifications and in
compliance with all material Legal Requirements and Insurance Requirements
and otherwise in accordance with the Development Agreement.
"Completion Guarantee" shall mean Guarantee of Completion, dated as
the date hereof, made by Lessee in favor of Lender.
"Construction Budget" shall mean the budget for the cost of
acquiring the Land and constructing the Improvements attached as Exhibit C
hereto, as it may be amended, supplemented or otherwise modified from time to
time with the prior written approval of Lender and Lessee.
"Construction Budget Deficit" shall have the meaning assigned to
that term in Section 2.3.
"Contingent Obligation" shall mean as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other monetary obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof; provided, however, that the term Contingent Obligation
shall not include (x) endorsements of instruments for deposit or collection
in the ordinary course of business or (y) guarantees made by a Person of the
obligations of a Subsidiary or Affiliate of such Person which do not
constitute Indebtedness of such Subsidiary or Affiliate and are incurred in
the ordinary course of business of such Subsidiary or Affiliate. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in
good faith.
"Construction Period" shall mean the period commencing on the
Property Closing Date for such Property and ending on the earlier to occur of
(a) the Interest Capitalization Termination Date or (b) Completion of such
Property.
"Consulting Professional" shall mean the Agent, or such other
architectural or engineering consultant as Lender may engage from time to
time to examine the Plans and Specifications, changes in the Plans and
Specifications and Construction Budget cost breakdowns and estimates, to make
periodic inspections of the progress on construction of the Improvements on
Lender's behalf and to advise and render reports to Lender.
"Contractual Obligation" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of November 22, 1995, and amended and restated as of
October 17, 1997, between Lender, as
"Default" shall mean any of the events specified in the "Events of
borrower, PNC Bank, National Association, as administrative agent, First
National Bank of Chicago as syndication agent, Bankers Trust Company, as real
estate administrative agent, and the lenders party thereto.
"Credit Agreement Event of Default" shall mean any event or
condition defined as an "Event of Default" in Article IX of the Credit
Agreement.
"Credit Agreement Interest Rate" shall mean as of any date of
determination, the weighted average interest rate payable by Lender on
outstanding loans under the Credit Agreement, including, interest payable
under Article IV of the Credit Agreement, expressed as a percentage on an
annualized basis.
"Default" shall mean any of the events specified in the "Events of
Default" subsection, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition has been satisfied.
"Developer" shall mean the person identified as the Developer in the
Development Agreement.
"Developer Basic Rent" shall mean the amount set forth in a Lease as
"Developer Basic Rent."
"Developer Equity" shall mean a portion of the developer's fees
payable by a Lessor as set forth in each Construction Budget equal to 5% of
the Total Property Costs (as defined in the Lease) for a particular Property
or, if there is no Developer with respect to a Project Loan, the equity, in
the amount of 5% of the total funds required by the Lessor on a Borrowing
Date, contributed by the Lessor simultaneously with the funding of such
Project Loan.
"Developer Yield" shall mean 12% of Developer Equity, payable as
Developer Basic Rent under the Lease.
"Development Agency Agreement" shall mean the Development Agency
Agreement, dated as of the date hereof between Borrower and the Developer,
pursuant to which the Developer agrees to assume all of the obligations of
Borrower under the Development Agreement.
"Development Agreement" shall mean the Development Agreement, dated
as of the date hereof between Borrower and Lessee, providing for the
construction and development of the Property.
"Development Documents" shall mean the collective reference to the
Architect's Agreement, the Development Agreement, the Development Agency
Agreement, the Plans and Specifications and the Permits.
"Dollar, Dollars, U.S. Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Environmental Laws" shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the
environment or employee safety in the work place.
"Event of Default" shall mean any of the events specified in the
"Events of Default" subsection, provided that any requirement for the giving
of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"Excepted Payments" shall mean:
(a) all indemnity payments (including indemnity payments
made pursuant to Section 13 of the Participation Agreement), whether made by
adjustment to Developer Basic Rent or otherwise, to which Lender, the Trust
Company, the Investor, or any of their respective Affiliates, agents,
officers, directors or employees is entitled;
(b) any amounts (other than Project Loan Basic Rent,
Termination Value, or Purchase Option Price) payable under any Operative
Agreement to reimburse Lender, the Trust Company, the Investor, or any of
their respective Affiliates (including the reasonable expenses of Lender, the
Trust Company, the Investor, or any of their Affiliates incurred in
connection with any such payment) for performing or complying with any of the
obligations of any of Lessees under and as permitted by any Operative
Agreement;
(c) any amount payable to the Investor by any transferee of
the interest of the Investor as the purchase price of the Investor's interest
in the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to
risks self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable to the Agent;
(e) any insurance proceeds under policies maintained by
Lender, the Trust Company, or the Investor other than such proceeds or
payments payable to the Agent;
(f) Transaction Expenses or other amounts or expenses paid
or payable to or for the benefit of Lender, the Trust Company or the
Investor;
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above; and
(h) any rights of the Investor, Lender, or the Trust
Company to demand, collect, sue for or otherwise receive and enforce payment
of any of the foregoing amounts.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by Lessee pursuant
to Article XVII of the Lease with respect to such Casualty or Condemnation.
"Excess Sale Proceeds" shall have the meaning specified in Section
9.1(b)(iv).
"Fixtures" shall mean all fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"Force Majeure Delay" shall mean any cause or event which is beyond
the reasonable control and not due to the fault or negligence of Borrower,
which delays, prevents or prohibits the Developer's construction of the
Improvements including without limitation, acts of God or the elements, fire,
strikes, labor disputes, delays in delivery of material and disruption of
shipping; provided, however, any such cause or event shall be deemed not to
be a Force Majeure Delay if Borrower shall fail to give Lender written notice
at the beginning of such delay as required under the Development Agreement.
"GAAP" shall mean generally accepted accounting principles as are in
effect from time to time.
"Governmental Authority" shall mean the United States of America,
any state and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality or any of them, now existing or subsequently created.
"Improvements" shall mean the improvements existing on the Land and
all improvements to be constructed on the Land and certain ancillary off-site
improvements, if any, to be constructed outside the Land, each in accordance
with the Plans and Specifications and the Development Agreement.
"Indebtedness" shall mean as to any Person at a particular time, (a)
indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which such Person is liable, contingently
or otherwise, as obligor, guarantor or otherwise and (b) obligations under
leases which shall have been or should be, in accordance with GAAP, recorded
as capital leases in respect of which obligations such Person is liable,
contingently or otherwise, or in respect of which obligations such Person
assures a creditor against loss.
"Independent Director" shall mean a Person which is a director among
the board of directors of the managing member or general partner, as
applicable, of Borrower which is reasonably satisfactory to Lenders who shall
not have been at the time of such individual's appointment or at any time
thereafter, and may not have been at any time during the preceding two years
(i) a shareholder of, or an officer, director, partner or employee of,
Borrower or any of its shareholders, subsidiaries or affiliates, (ii) a
substantial creditor, customer of, or supplier to, Borrower or any of its
shareholders, subsidiaries or affiliates, (iii) a Person or other entity
controlling or under common control with any such shareholder, partner,
supplier or customer, or (iv) a member of the immediately family of any such
shareholder, officer, director, partner, employee, supplier or customer. As
used herein, the term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person or entity, whether through ownership of voting securities, by
contract or otherwise.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by Lessee or
required by the Development Agency Agreement to be maintained by the
Developer, and all requirements of the issuer of any such policy.
"Interest Capitalization Termination Date" shall mean the date which
occurs 24 months subsequent to the Property Closing Date.
"Interest Payment Date" shall mean each date specified for the
payment of interest in Section 3.2.
"Investor" shall mean Sam Project Funding Corp. I., a Delaware
corporation.
"Land" shall have the meaning specified in the Preliminary Statement.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling,
order, injunction, writ, decree or award of any Official Body.
"Lease" shall mean the Lease, dated as of the date hereof, between
Lessee and Borrower with respect to the Property, as the same may be
supplemented by a Lease Supplement.
"Lease Event of Default" shall have the meaning given to such term
in Section 18.1 of the Lease.
"Lease Supplement" shall have the meaning given to such term in
Section 2.1 of the Lease, if applicable.
"Legal Requirements" shall mean all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations and requirements of every Governmental Authority having
jurisdiction over the Land, the Improvements or Borrower, and all covenants,
restrictions and conditions now or in the future applicable to the Land or
the Improvements.
"Lessee" shall mean Borders, Inc., a Colorado corporation.
"Lessor Liens" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor
or the Developer, (b) any act or omission of the Lessor or the Developer
which is not required by the Project Loan Documents or is in violation of any
of the terms of the Project Loan Documents, (c) any claim against the Lessor
or the Developer with respect to the Property against which Lessee is not
required to indemnify Lessor or the Developer or (d) any claim against the
Lessor or the Developer arising out of any transfer by the Lessor of all or
any portion of the interest of the Lessor in the Property, other than the
transfer of title to or possession of the Property by Lessor pursuant to and
in accordance with the Lease or the Project Loan Agreement or pursuant to the
exercise of the remedies set forth in Article XVIII of the Lease.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Maturity Date" shall mean October 16, 2002, as such date may be
extended pursuant to the Credit Agreement.
"Modifications" shall have the meaning specified in Section 12.1 of
the Lease.
"Mortgage" shall mean the Mortgage or Deed of Trust, as applicable,
dated as of the date hereof, made by Borrower in favor of Lender.
"Net Sale Proceeds" shall have the meaning specified in Section
9.1(b)(iv).
"Obligation" shall mean any obligation or liability of Borrower to
Lender, however created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
under or in connection with this Agreement or any other Project Loan
Document.
"Official Body" shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Operative Agreements" shall have the meaning assigned to such term
in the Lease.
"Organizational Certificate of Borrower" shall mean the certificate
executed by Borrower and delivered to Lender at the time of execution and
delivery of this Agreement by Borrower.
"Outside Completion Date" shall mean a date one month prior to the
Maturity Date.
"Permits" shall mean all consents, licenses and building permits
required for construction, completion, occupancy and operation of the
Improvements in accordance with all Legal Requirements affecting the
Property.
"Permitted Exceptions" shall mean those exceptions to title of the
Property set forth in the mortgagee title insurance policy issued to Lender
by the Title Company.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plans and Specifications" shall mean the plans and specifications
for the construction of the Improvements, including, without limitation,
installation of curbs, sidewalks, gutters, landscaping, utility connections
(whether located on or off the Land) and all fixtures and equipment necessary
for construction, operation and occupancy of the Improvements, prepared or to
be prepared by the Architect, and approved in writing by Lender, as such
plans and specifications may be amended, supplemented or otherwise modified
from time to time with Lender's prior written approval.
"Principal Office" shall mean the main lending office of Bankers
Trust Company in New York, New York.
"Project Cost" shall mean the cost to the Lessor to construct any
Improvements, Fixtures or Modifications to be used on the Property in
accordance with the Plans and Specifications and the Operative Agreements.
"Project Loan" shall have the meaning set forth in the Preliminary
Statement.
"Project Loan Advance" shall mean each disbursement of the Project
Loan pursuant to Section 2.6 hereof.
"Project Loan Basic Rent" shall mean an amount equal to the interest
due on the Project Loan on any Specified Interest Payment Date pursuant to
the Project Loan Agreement.
"Project Loan Commitment" shall mean Lender's obligation to advance
the Project Loan to Borrower in accordance with the terms of this Agreement.
"Project Loan Documents" shall mean the collective reference to this
Agreement, the Project Loan Note, the Security Documents and all other
documents and instruments from time to time evidencing or securing the
Project Loan.
"Project Loan Note" shall have the meaning specified in Section 2.7.
"Property" shall mean the collective reference to the Land and the
Improvements.
"Property Acquisition Cost" shall mean the cost to Lessor to
purchase the Property.
"Property Closing Date" shall mean each date on which a Lessor
purchases or ground leases the Property.
"Purchase Option" shall have the meaning given to such term in
Section 21.1 of the Lease or in the Three Party Agreement.
"Regulated Substances" shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive
material, refuse, garbage, wastes, chemicals, petroleum products,
by-products, co products, impurities, dust, scrap, heavy metals, any
substance defined as a "hazardous substance," "pollutant," "pollution,"
"contaminant," "hazardous or toxic substance," "extremely hazardous
substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial
waste," "residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," "regulated
substance" or any related materials, substances or wastes as now or hereafter
defined pursuant to any Environmental Laws, the generation, manufacture,
extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
"Rent" shall have the meaning given to such term in Section 3.4 of
the Lease.
"Requisition" shall have the meaning specified in Section 2.5.
"Responsible Officer" shall mean Richard Agree, or such other
individual as shall be named by a Responsible Officer by notice to Lender.
"Security Documents" shall mean the collective reference to the
Mortgage, the Assignment of Lease and consent thereto, the Completion
Guaranty, the Assignment of Development Agency Agreement and the consent
thereto and all other documents from time to time securing the Indebtedness
evidenced by the Project Loan Note.
"SPC Member" shall have the meaning described in Section 5.12.
"Subsidiary" of any Person shall mean any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of:
(i) the outstanding capital stock having voting power to elect
a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might
having voting power upon the occurrence of any
contingency),
(ii) the interest in the capital or profits of such partnership
or joint venture, or
(iii) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person
and one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Taxes" shall have the meaning given to such term in the Lease.
"Three Party Agreement" shall mean that certain agreement of even
date herewith entitled "Three Party Agreement" and executed by Agree Limited
Partnership, a Delaware limited partnership, Borrower and Lessee.
"Title Company" shall mean Chicago Title Insurance Company, together
with such reinsurers or coinsurers of such title company or companies, or
such other title companies as may be approved by Lender.
"Total Property Costs" shall mean the sum of Project Cost and
Property Acquisition Cost.
"Transaction Expenses" shall mean all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Agreements and the transactions contemplated by the Operative Agreements
including:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative Agreements
and the other transaction documents, preparing for the closings under, and
rendering opinions in connection with, such transactions and in rendering
other services customary for counsel representing parties to transactions of
the types involved in the transactions contemplated by the Operative
Agreements;
(b) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of the
other transaction documents; and
(c) any and all Taxes and fees incurred in recording or
filing any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement with
any public office, registry or governmental agency in connection with the
transactions contemplated by the Operative Agreements.
1.2 Construction. Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Project Loan Documents:
(a) references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the
phrase "including without limitation";
(b) references to "determination" of or by Lender shall be
deemed to include good faith estimates by Lender (in the case of quantitative
determinations) and good faith beliefs by Lender (in the case of qualitative
determinations) and such determination shall be conclusive absent manifest
error;
(c) whenever Lender is granted the right herein to act in
its sole discretion or to grant or withhold consent such right shall be
exercised in good faith;
(d) the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Project Loan Document refers to
this Agreement or such other Project Loan Document as a whole and not to any
particular provision of this Agreement or such other Project Loan Document;
(e) the section and other headings contained in this
Agreement or such other Project Loan Document and the Table of Contents
preceding this Agreement or such other Project Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Project Loan Document or the interpretation
thereof in any respect;
(f) article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Project Loan Document, as
the case may be, unless otherwise specified;
(g) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement or other Project Loan Document, as
the case may be, and reference to a Person in a particular capacity excludes
such Person in any other capacity;
(h) reference to any agreement (including this Agreement
and any other Project Loan Document together with the schedules and exhibits
hereto or thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated;
(i) relative to the determination of any period of time,
"from" means "from and including," "to" means "to but excluding" and
"through" means "through and including"; and
(j) references to "shall" and "will" are intended to have
the same meaning.
1.3 Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP;
provided, that if any change in GAAP or the application thereof occurs
hereafter, or if Lessee adopts a change to its accounting principles or
methods with the agreement of its independent certified public accountants,
and such change results in a change in the calculation of any financial
covenant or restriction set forth herein, then the parties hereto agree to
enter into and diligently pursue negotiations in order to amend such
financial covenant or restriction so as to equitably reflect such change,
with the desired result that the criteria for evaluating the financial
condition and results of operations of Lessee shall be the same after such
change as if such change had not been made. Pending the resolution of any
such negotiations, Lessee agrees to provide to Lender such unaudited
financial information and pro forma statements using the accounting methods
and principles used in the preparation of the audited financial statements
for the fiscal year ended January 26, 1997, as are necessary to enable Lender
to test any financial covenants contained herein.
SECTION 2. THE PROJECT LOAN
2.1 Project Loan Commitment. Subject to the terms and conditions of
this Agreement and relying upon the representations and warranties herein set
forth, Lender agrees to make the Project Loan to Borrower from time to time
on any Borrowing Date on or after the date hereof to, but not including, the
day which is one month prior to the Maturity Date in an aggregate principal
amount not to exceed at any one time the Project Loan Commitment.
2.2 Determination of Amounts of Project Loan Advances.
(a) Disbursements for costs of acquiring the Land and for
costs of developing, constructing and equipping the Improvements included in
the Construction Budget, shall be made as such costs are incurred in such
amounts as shall be determined by Lender, based upon certifications of
Borrower and the Consulting Professional and such other evidence as may be
required by Lender, less a retention of 10% of the costs attributable to
construction of the Improvements until the Improvements have been completed;
provided, however, that after 50% of the work of constructing the
Improvements has been completed, Lender, with Lessee's consent, may determine
that satisfactory progress is being made and may disburse the full amount of
such costs as such costs are incurred or may impose a reduced retention; and
provided further than when the Improvements or any part of the Improvements
identified as a separate line item on the Construction Budget have been
Completed, Lender, with Lessee's consent, may release and disburse that
portion of the retention with respect to such line item which may be
determined by Lender to be in excess of the requirements for Lender's
protection. Upon final completion of the work performed by any subcontractor
(as determined by Lender in its sole discretion), Lender shall release that
portion of the retention allocated to the work performed by such
subcontractor in accordance with the Construction Budget.
(b) Disbursements for any other costs related to the
Property included in the Construction Budget shall be made as such costs are
incurred, in such amounts as shall be determined by Lender, based upon
certifications of Borrower and such other evidence as may be required by
Lender.
2.3 Construction Budget Evaluation. If Lender determines at any time
that the portion of the Available Project Loan Commitment allocated to any
line item of the Construction Budget or otherwise is not sufficient to pay
the cost of completing construction of such line item or the Improvements, or
in the case of the line item for interest, to pay interest on the Project
Loan during the Construction Period (any such deficiency, a "Construction
Budget Deficit"), Lender may, in its sole discretion, stop making Project
Loan Advances and Borrower shall deposit with Lender additional funds from
some other source in an amount equal to the Construction Budget Deficit. Sums
so deposited with Lender shall be applied to pay costs of any line item or
line items as to which the Construction Budget Deficit exists before Lender
advances proceeds of the Project Loan to pay such costs.
2.4 Reduction of Project Loan Commitment. So long as no Construction
Budget Deficit occurs as a result thereof, Borrower shall have the right at
any time and from time to time upon five (5) Business Days' prior written
notice to Lender to permanently reduce or to terminate the Project Loan
Commitment without penalty or premium (except for any breakage fees payable
under the Credit Agreement resulting from such reduction or termination)
provided that any such reduction or termination shall be accompanied by
prepayment of the Project Loan to the extent necessary to reduce the
outstanding amount of Project Loan Advances to an amount equal to or less
than the Project Loan Commitment, as so reduced, together with the full
amount of interest and fees accrued on the principal sum to be prepaid.
2.5 Project Loan Advance Requests.
(a) Except as otherwise provided herein, Borrower may on
the fifteenth or thirtieth day of each calendar month or on such other dates
as permitted by Lessee (or, if such days are not Business Days, on the next
succeeding Business Day) prior to the date which is one month prior to the
Maturity Date request Lender to make Project Loan Advances by delivering to
Lender, not later than 10:00 a.m. Eastern Standard time (i) ten (10) Business
Days prior to the proposed Borrowing Date with respect to (A) the initial
advance of a Project Loan or (B) any other advance of a Project Loan where
Lessee has not waived certain conditions precedent to such Project Loan
Advance pursuant to Section 11.2 to the Participation Agreement or (ii) two
(2) Business Days prior to the proposed Borrowing Date with respect to any
Project Loan Advance (other than an Acquisition Advance) where Lessee has
waived the conditions precedent to such Project Loan Advance pursuant to
Section 11.2 to the Participation Agreement, a duly completed request
therefor in form acceptable to Lender or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a
"Requisition"), it being understood that Lender may rely on the authority of
any individual making such a telephonic request without the necessity of
receipt of such written confirmation. Each Requisition shall be irrevocable
and shall specify (i) the proposed Borrowing Date and (ii) the aggregate
amount of the proposed Project Loan Advance which shall not be less than
$50,000, except for the last Requisition, which may be in an amount equal to
the balance of the Project Loan.
(b) Borrower acknowledges and agrees that Lessee shall make
all requests and make all other decisions under this Agreement on behalf but
with the consent of Borrower. Borrower further acknowledges and agrees that
the Agent shall have the authority to make all decisions, take all actions
and receive all payments, on behalf of Lender under this Agreement.
2.6 Project Loan Advances. Lender shall remit the principal amount
of the Project Loan Advance to be made to Borrower in U.S. Dollars and
immediately available funds at the Principal Office prior to 12:00 (noon)
Eastern Standard time on the Borrowing Date.
2.7 Notes. The Project Loan is evidenced by a promissory note of
Borrower dated as of the date of this Agreement (the "Project Loan Note"), in
a principal amount equal to the Project Loan Commitment. Lender is hereby
authorized to record the date and amount of each Project Loan Advance made by
Lender, each continuation thereof, the date and amount of each payment or
prepayment of principal thereof on the schedule annexed to and constituting a
part of the Project Loan Note, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded,
provided, that the failure to make any such recordation or any error in such
recordation shall not affect Borrower's obligations hereunder or under the
Project Loan Note.
2.8 Interest Rate on Project Loan Advances. Borrower shall pay
interest in respect of the outstanding unpaid principal amount of the Project
Loan at the Credit Agreement Interest Rate.
2.9 Maximum Interest Rate. If at any time the designated rate
applicable to the Project Loan made by Lender exceeds the highest lawful
rate, the rate of interest on the Project Loan shall be limited to Lender's
highest lawful rate.
2.10 Use of Proceeds. The proceeds of the Project Loan shall be used
by Borrower only for payment of costs specified in the Construction Budget
and for the acquisition of the Property.
2.11 Advances to Pay Interest. During the Construction Period, on
each date which is one Business Day prior to any Interest Payment Date
Borrower shall be deemed to have requested a borrowing pursuant to Section
2.5 in an amount equal to the aggregate amount of Allocated Interest due and
payable on such date with respect to the Property. Three Business Days prior
to such Interest Payment Date, Lessee, as agent for Borrower, shall deliver
to Lender a notice indicating the amount of such Allocated Interest. The
Borrowing Date with respect to any such borrowing shall be the applicable
Interest Payment Date (provided, that the making of an advance of the Project
Loan pursuant to such borrowing shall be subject to satisfaction of the
applicable conditions precedent set forth in Section 7 and Section 8, as
applicable) and the proceeds of such borrowing shall be deemed to be applied
to pay such Allocated Interest. Lender shall record the information relating
to such borrowing to pay Allocated Interest on the schedule annexed to and
constituting part of its Project Loan Note.
SECTION 3. PAYMENTS
3.1 Payments. All payments and prepayments to be made in respect of
principal, interest, fees or other amounts due from Borrower hereunder shall
be payable prior to 2:00 p.m. (Eastern Standard time) on the Interest Payment
Date without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Borrower, and without setoff, counterclaim or
other deduction of any nature, and an action therefor shall immediately
accrue. Such payments shall be made to Lender at the Principal Office in U.S.
Dollars and in immediately available funds. Lender's statement of account,
ledger or other relevant record shall, in the absence of manifest error, be
conclusive as the statement of the amount of principal of and interest on the
Project Loan and other amounts owing under this Agreement and shall be deemed
an "account stated." All Project Loan Advances outstanding on the Maturity
Date shall be due and payable in full on the Maturity Date.
3.2 Interest Payment Dates. Interest on any portion of the Project
Loan shall be due and payable in arrears on the last Business Day of each
March, June, September and December after the date hereof and on the Maturity
Date or upon acceleration of the indebtedness evidenced by the Project Loan
Note. Interest on prepayments of principal under Section 3.3 shall be paid on
the date such prepayment is due. Interest on the principal amount of the
Project Loan shall be due and payable on demand after such principal amount
becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
3.3 Prepayments.
(a) Optional Prepayments. Borrower shall have the right at
its option from time to time, with the written consent of Lessee, to prepay
the Project Loan in whole or part without premium or penalty on the date
specified in a notice by Borrower pursuant to this subsection; provided,
however, that if Lessee is not in Default of its Obligations under the
Operative Agreements beyond any applicable cure period, Borrower shall not
prepay the Project Loan without the prior written consent of Lessee. Whenever
Borrower desires to prepay any part of the Project Loan, Borrower shall, with
the written consent of Lessee, provide a prepayment notice to Lender at least
one (1) Business Day prior to the date of prepayment of Project Loan setting
forth the following information: (i) the date, which shall be a Business Day,
on which the proposed prepayment is to be made; and (ii) the total principal
amount of such prepayment, which shall not be less than Twenty- Five Thousand
Dollars ($25,000). All prepayment notices shall be irrevocable. The principal
amount of the Project Loan for which a prepayment notice is given, together
with interest on such principal amount, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made.
(b) Mandatory Prepayments.
(i) If on any date Borrower shall receive any
payment which is the proceeds of any
title insurance policy (excluding any
payments in respect thereof which are
payable to Lessee in accordance with the
Lease), Borrower shall prepay the Project
Loan on such date in accordance with
Section 9.1(b).
(ii) Intentionally Deleted.
(iii) The Borrower shall prepay the Project
Loan in full on any date that the
Borrower shall receive any amount which
represents proceeds of a payment by
Lessee in respect of (A) the Termination
Value in connection with the delivery of
a Termination Notice; (B) the
Satisfactions Payment required by Section
21(e) of the Lease; (C) a sale of the
Property pursuant to Article XXI or
Article XXII of the Lease; (D) a sale of
the Property pursuant to the terms of the
Three Party Agreement; or (E) Lessor
Financing or Take-Out Financing provided
to the Lessor pursuant to the provisions
of the Three Party Agreement.
(iv) On any date on which the Lessor shall
receive any payment in respect of Excess
Proceeds, Borrower shall prepay the
Project Loan (to the extent not already
paid in full) in accordance with Section
9.1(b)(viii).
(v) Amounts prepaid on account of the Project
Loan may not be reborrowed.
3.4 Indemnity. Borrower covenants to indemnify Lender and hold
Lender harmless from and against all costs, losses and expenses incurred by
Lender under the Credit Agreement occasioned by a default by Borrower under
this Agreement, including, without limitation, breakage costs caused by a
failure by Borrower to make payments hereunder when due.
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement, and in order
to induce Lender to make the Project Loan to Borrower, Borrower represents
and warrants to Lender as follows:
4.1 Existence; Compliance with Law. Borrower (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization, (b) has the power and authority, and the legal right, to
own and operate its property and to conduct the business in which it is
currently engaged, (c) is a limited liability company duly qualified as a
foreign limited liability company and in good standing under the law of the
jurisdiction in which the Property is located and (d) is in compliance with
all material Legal Requirements;
4.2 Power; Authorization; Enforceable Obligations. Borrower has the
power and authority, and the legal right, to make, deliver and perform the
Project Loan Documents to which it is a party and to borrow hereunder and has
taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the Project Loan Note and to authorize the
execution, delivery and performance of the Project Loan Documents to which it
is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Project Loan
Documents to which Borrower is a party. This Agreement has been, and each
other Project Loan Document to which it is a party will be, duly executed and
delivered on behalf of Borrower. This Agreement constitutes, and each other
Project Loan Document to which it is a party when executed and delivered will
constitute, a legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing;
4.3 No Litigation. There is no action, suit or proceeding pending,
or to the best of Borrower's knowledge threatened, against or affecting
Borrower or the Property or that might have a materially adverse affect on
Borrower or the Property in any court, or before or by any Governmental
Authority, whether federal, state, county or municipal, which has not been
disclosed in writing to Lender;
4.4 Consents, Approvals, Authorizations, Etc. No consent, approval,
order or authorization of or registration, declaration or filing with any
Governmental Authority is required in connection with the valid execution and
delivery of the Project Loan Documents or the Development Documents or the
carrying out or performance of any of the transactions required or
contemplated by the Project Loan Documents or the Development Documents or,
if required, such consent, approval, order or authorization has been obtained
or such registration, declaration or filing has been accomplished, except as
has been previously disclosed to Lender or waived by Lessee with the consent
of Lender;
4.5 No Legal Bar. The execution, delivery and performance of the
Project Loan Documents and the Development Documents, the borrowings under
this Agreement and the use of the proceeds of the Project Loan will not
violate any Legal Requirement or any Contractual Obligation of Borrower and
will not result in, or require, the creation or imposition of any Lien on any
of Borrower's properties or revenues pursuant to any Legal Requirement or
Contractual Obligation, except for the Lien of the Security Documents;
4.6 Compliance with Building Codes, Zoning Laws, Etc. Borrower has
no knowledge of any existing, probable or potential violations of any Legal
Requirement affecting the Land or the construction, use or occupancy of the
Improvements;
4.7 Ownership of Property; Liens. Borrower holds good record and
marketable title in fee simple to, or a valid leasehold interest in, the
Property, and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien, other than a
Permitted Exception;
4.8 No Default. Borrower is not in default under or with respect to
any Contractual Obligation in any respect which could be materially adverse
to the business, operations, property or financial or other condition of
Borrower, or which could materially adversely affect the ability of Borrower
to perform its obligations under the Project Loan Documents or the
Development Documents. No Default or Event of Default has occurred and is
continuing;
4.9 Taxes. Borrower has filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due and
payable on such returns or on any assessments made against Borrower or the
Property and all other taxes, fees or other charges imposed on Borrower or
the Property by any Governmental Authority (other than those taxes, the
amount or validity of which is being contested in good faith by appropriate
proceedings diligently prosecuted and with respect to which prior notice has
been given to Lender and reserves satisfactory to Lender have been provided
or a bond satisfactory to Lender has been posted); and no tax Liens have been
filed and no claims are being asserted with respect to any such taxes, fees
or other charges;
4.10 Availability of Utilities. All utility services and facilities
necessary for the construction of the Improvements without impediment or
delay (including, without limitation, gas, electrical, water and sewage
services and facilities) will be available at the boundaries of the Land upon
the commencement of construction and all utility services necessary for the
operation of the Improvements for their intended purposes will be available
at or within the boundaries of the Land when needed;
4.11 Permits, Etc. All Permits for the construction of the
Improvements required to the date that this representation is being made or
reaffirmed have been obtained and are in full force and effect;
4.12 Financial Statements. Any and all financial statements
delivered to Lender by or on behalf of Borrower are true and correct in all
material respects and fairly present the financial conditions of their
subjects as of their respective dates, no material adverse change has
occurred in the financial conditions reflected since their respective dates
and no additional Indebtedness has been incurred by their subjects since the
respective dates of the latest statements, other than the borrowings
contemplated by this Agreement or other Indebtedness which has been approved
by Lender in writing. No such financial statement or any certificate or
statement furnished to Lender by or on behalf of Borrower in connection with
the transactions contemplated by this Agreement, and no representation or
warranty in this Agreement, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained in such financial statements, certificates or other statements or
this Agreement not misleading;
4.13 Federal Regulations. No part of the proceeds of the Project
Loan will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect. If requested by Lender, Borrower
will furnish to Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation
G or Regulation U, as the case may be;
4.14 Investment Company Act; Other Regulations. Borrower is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness;
4.15 Environmental Matters.
(a) The Property does not contain any Regulated Substances
in amounts or concentrations which (i) constitute or constituted a violation
of, or (ii) could give rise to liability under, any Environmental Law.
(b) The Property and all operations at the Property are in
compliance with all applicable Environmental Laws, and there is no
contamination at, under or about the Property or violation of any
Environmental Law with respect to the Property.
(c) Borrower has not received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
the Property and Borrower does not have knowledge or reason to believe that
any such notice will be received or is being threatened.
(d) Regulated Substances have not been transported or
disposed of from the Property in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability under,
any Environmental Law, nor have any Regulated Substances been generated,
treated, stored or disposed of at, on or under the Property in violation of,
or in a manner that could reasonably be expected to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Borrower,
threatened, under any Environmental Law to which Borrower is or will be named
as a party with respect to the Property nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Property.
(f) There has been no release or threat of release of
Regulated Substances at or from the Property, or arising from or related to
the operations of Borrower in connection with the Property, in violation of
or in amounts or in a manner that could give rise to liability under any
Environmental Laws;
4.16 Regulation H. The Mortgage does not encumber improved real
property which is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968; and
4.17 No other Assets.
(a) Borrower does not now own and will not in the future
own any asset or property other than the Property and incidental property
necessary for the ownership or operation of the Property.
(b) Borrower has not made and will not in the future make
any loans or advances to any third party (including any affiliate or
constituent party, any Beneficial Owner or any affiliate of any constituent
party of Beneficial Owner), and shall not acquire obligations or securities
of its affiliates.
(c) Borrower is and will remain solvent and Borrower will
pay its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
SECTION 5. AFFIRMATIVE COVENANTS
Borrower agrees, unless otherwise consented to in writing by Lender,
that, so long as the Project Loan Commitment remains in effect or the Project
Loan Note remains outstanding and unpaid, Borrower shall:
5.1 Construction. Cause the Completion and equipping of the
Improvements to occur on or before the Outside Completion Date. The
Improvements shall be constructed and equipped in full compliance with the
Legal Requirements affecting the Property and all requirements of the
appropriate Board of Fire Underwriters or other similar body acting in and
for the locality in which the Property is situated;
5.2 Correction of Work. Upon demand of Lender, and at Borrower's
sole cost and expense, correct any structural defect in the Improvements, any
departure from the Plans and Specifications and any failure to comply with
applicable Legal Requirements;
5.3 No Encroachments. Construct the Improvements entirely on the
Land (other than certain off-site ancillary Improvements) and not encroach
upon or overhang any easement or right-of-way or the land of others (unless
such encroachment or overhang is consented to in writing by the owner of the
affected property). When erected the Improvements shall be wholly within any
building restriction lines, however established. Borrower shall furnish from
time to time evidence satisfactory to Lender of compliance with the foregoing
covenant, including, without limitation, a survey prepared by a registered
surveyor or engineer;
5.4 Certain Notices. Give notice to Lender promptly upon the
occurrence of:
(a) the receipt by Borrower of any notice given to Borrower
that a default by Borrower has occurred under the Lease or any of the
Development Documents;
(b) the giving by Borrower of any notice alleging that a
default has occurred under the Lease or any of the Development Documents;
(c) the receipt by Borrower of any notice given to Borrower
or with respect to the Property or the giving by Borrower of any notice which
alleges that any portion of construction or equipping or furnishing of the
Improvements does not comply with any Legal Requirement;
(d) any condition which results or is reasonably likely to
result in a Force Majeure Delay in completion of the Improvements;
(e) any Default or Event of Default;
(f) any (i) default or event of default under any
Contractual Obligation of Borrower or (ii) litigation, investigation or
proceeding which may exist at any time between Borrower and any Governmental
Authority; and
(g) any litigation or proceeding affecting Borrower in
which the amount involved is $100,000 or more and not covered by insurance or
in which injunctive or similar relief is sought;
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
in such notice and stating what action Borrower proposes to take with respect
to such occurrence;
5.5 Indemnification. Indemnify Lender against any claims for
brokerage fees or commissions asserted in connection with the Project Loan
and to pay all expenses incurred by Lender in connection with the defense of
any action or proceeding brought to collect any such brokerage fees or
commissions;
5.6 Construction Schedule. As soon as reasonably available after
commencement of construction, provide Lender, at Borrower's expense, with a
critical path method schedule for completion of the construction and
equipping of the Improvements, which schedule shall be in form and substance
satisfactory to Lender;
5.7 Expenses.
(a) Pay or reimburse Lender for all expenses incurred by
Lender before and after the date of this Agreement with respect to any and
all transactions contemplated by this Agreement including, without
limitation, the preparation of any document reasonably required by Lender and
the enforcement of any of Lender's rights under this Agreement and the other
Project Loan Documents.
(b) If any action or proceeding is commenced by Lender,
including, without limitation, any action to foreclose the lien of the
Mortgage or to collect the Project Loan or enforce the Completion Guarantee
or to which Lender is made a party, or in which it becomes necessary to
defend or uphold the lien of the Mortgage, or in which Lender is served with
any legal process, discovery notice or subpoena relating to Lender's lending
to Borrower or accepting the Completion Guarantee, Borrower will reimburse
Lender for all expenses which have been or may be incurred by Lender arising
from or in connection with such action or proceeding;
5.8 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its existence and take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business and comply with all
Contractual Obligations (including the Project Loan Documents, the Lease and
the Development Documents) and Legal Requirements;
5.9 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Legal Requirements shall be made of all
dealings and transactions in relation to its business and activities; and
permit representatives of Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of
Borrower with officers and employees of Borrower and with its independent
certified public accountants;
5.10 Compliance with Project Loan Documents. Borrower shall at all
times (a) observe and perform all of the covenants, conditions and
obligations required to be performed by it (whether in its capacity as Lessor
or otherwise) under each Project Loan Document and each Development Document
to which it is a party and (b) observe and perform, or cause to be observed
and performed, (i) all of the covenants, conditions and obligations of Lessee
under the Lease, even in the event that the Lease is terminated at stated
expiration, following a Lease Event of Default or otherwise and (ii) all of
the covenants, conditions and obligations of the Developer relating to the
construction of Improvements under the Development Agency Agreement;
provided, that the performance of any such obligation by Lessee during the
term of the Lease or by the Developer during the term of the Development
Agency Agreement, respectively, shall be deemed to satisfy such obligation on
the part of Borrower;
5.11 Further Assurances. At any time and from time to time, upon the
written request of Lender, and at the sole expense of Borrower, Borrower will
promptly and duly execute and deliver such further instruments and documents
and take such further action as Lender may reasonably request for the purpose
of obtaining or preserving the full benefits of this Agreement and the other
Project Loan Documents and of the rights and powers herein or therein
granted; and
5.12 Single Purpose Entity; Separateness.
(a) Borrower will not engage in any business other than the
ownership, management, leasing and operation of the Property and Borrower
will conduct and operate its business as presently conducted and operated.
(b) Borrower will not enter into any contract or agreement
with any affiliate of Borrower, any constituent party of Borrower, the holder
of any partnership or membership interest, any manager or the owner of any
beneficial interest in Borrower (each, a "Beneficial Owner") or any affiliate
of any constituent party or Beneficial Owner, except upon terms and
conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
any such party.
(c) Borrower has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence including, without limitation, the holding of such annual and other
meetings as are required by Borrower's organizational documents, and Borrower
will not, nor will Borrower permit any constituent party or Beneficial Owner
to amend, modify or otherwise change the partnership certificate, partnership
agreement, articles of incorporation and bylaws, trust certificate and
agreement or other organizational documents of Borrower or such constituent
party or Beneficial Owner, if such amendments would violate any provision of
the Project Loan Documents, without the prior written consent of Lender,
which consent shall not be unreasonably withheld, nor will Borrower permit
any constituent party or Beneficial Owner to amend, modify or otherwise
change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, trust certificate and agreement or other
organizational documents of such constituent party or Beneficial Owner, if
such amendment, modification or change (i) would adversely affect the
bankruptcy remote nature of Borrower; or (ii) would adversely affect Lender's
interest in the Project Loan. Borrower shall deliver copies of minutes of
annual meetings of Borrower to Lender within thirty (30) days of its receipt
of written request therefor.
(d) Borrower will maintain books, records, financial
statements and bank accounts separate from those of its affiliates and any
constituent party and Borrower will file its own tax returns where required
by applicable code or regulation. Borrower shall maintain its books, records,
resolutions and agreements as official records.
(e) Borrower will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower, any constituent party of Borrower, any
Beneficial Owner or any Affiliate of any constituent party), and shall
conduct business in its own name and shall maintain and utilize separate
stationery, invoices and checks. Borrower shall correct any known or unknown
misunderstanding regarding its status as a separate entity and shall not
identify itself as a division or part of its Affiliates or any of its
Affiliates as a division or part of Borrower.
(f) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations.
(g) Neither Borrower nor any constituent party will seek or
effect the liquidation, dissolution, winding up, consolidation or merger, in
whole or in part, of Borrower or the sale of all or substantially all of
Borrower's or any constituent party's assets.
(h) Borrower will not commingle the funds and other assets
of Borrower with those of any affiliate or constituent party, any Beneficial
Owner, or any affiliate of any constituent party or Beneficial Owner, or any
other Person.
(i) Borrower has and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any affiliate or constituent
party, any Beneficial Owner, or any affiliate of any constituent party or
Beneficial Owner, or any other Person.
(j) Borrower does not and will not hold itself out to be
responsible for the debts or obligations of any other Person.
(k) If Borrower is a limited liability company, partnership
or business trust, at least one manager, managing partner, general partner or
trustee (the "SPC Member") of Borrower shall itself be a limited liability
company or corporation the sole asset of which is its interest in Borrower
and which at all times has as one of its members or directors an individual
who qualifies as an Independent Director, the SPE Member will at all times
comply with each of the representations, warranties, and covenants contained
in this Section 5.12 as if such representation, warranty or covenant were
made, mutatis mutandis, directly by such SPC Member, the SPC Member and the
Beneficial Owner shall cause Borrower at all times to comply with each of the
representations, warranties, and covenants contained in this Section 5.12.
(l) Borrower shall not cause or permit the board of
directors of Borrower or the SPC Member, as applicable, to take any action
which, under the terms of any certificate of incorporation, by-laws,
operating agreement or any voting trust agreement with respect to any common
stock, requires the unanimous vote of the board of directors of Borrower or
the general partners or members of Borrower or the SPC Member, as applicable,
unless at the time of such action there shall be at least one member of the
board of directors of Borrower or the SPC Member, as applicable, who is an
Independent Director.
(m) Borrower has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or
contingent (including guaranteeing any obligation), other than (i) the
Project Loan or (ii) unsecured trade debt customarily payable within thirty
(30) days.
Borrower shall deliver a certificate to Lender within thirty (30)
days upon written request from Lender but not more frequently than on an
annual basis except for good cause shown, certifying as to its compliance
with each of the provisions of this Section 5.12.
SECTION 6. NEGATIVE COVENANTS
Borrower agrees that, so long as the Project Loan Commitment remains
in effect or the Project Loan Note remains outstanding and unpaid, Borrower
shall not:
6.1 Changes in Plans and Specifications. Modify or supplement the
Plans and Specifications in any material respect without the prior written
consent, as required, of all Governmental Authorities which previously have
approved the matters to be changed;
6.2 Change Orders. Direct or permit the performance of any work
pursuant to any revision (of whatever nature or form) of the Plans and
Specifications or any change orders or change bulletins or other instruments
or understandings without the consent of Lessee, and if such work would
result in a Construction Budget Deficit, the consent of Lender;
6.3 Changes in Agreements. Surrender, terminate, cancel, rescind or
supplement, alter, revise, modify or amend any of the Development Documents
or permit any such action to be taken;
6.4 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon the Property except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Borrower or
Lessee in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than sixty (60) days or which are
being contested in good faith by appropriate proceedings;
(c) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and which do not in any case
detract from the value of the Property or interfere with the ordinary conduct
of the business of Borrower or Lessee;
(d) Liens created pursuant to the Project Loan Documents;
and
(e) Permitted Exceptions;
6.5 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligations;
6.6 Other Activities. Conduct, transact or otherwise engage in, or
commit to transact, conduct or otherwise engage in, any business or
operations other than the entry into, and exercise of rights and performance
of obligations in respect of, the Project Loan Documents, the Lease and the
Development Documents and other activities incidental or related to the
foregoing;
6.7 Ownership of Properties, Indebtedness. Own, lease, manage or
otherwise operate any properties or assets other than in connection with the
activities described in Section 6.6, or incur, create, assume or suffer to
exist any Indebtedness or other consensual liabilities or financial
obligations other than as may be incurred, created or assumed or as may exist
in connection with the Project Loan and other obligations incurred by
Borrower hereunder;
6.8 Disposition of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether now
owned or hereafter acquired, except to the extent expressly contemplated by
the Project Loan Documents;
6.9 Discharge of Liens. Create or permit to exist at any time, and
will, at its own expense, promptly take such action as may be necessary duly
to discharge, or cause to be discharged, all Lessor Liens attributable to it,
provided, that Borrower shall not be required to discharge any Lessor Lien
while the same is being contested in good faith by appropriate proceedings
diligently prosecuted so long as such proceedings shall not involve any
material danger of impairment of any of the Liens contemplated by the
Security Documents or of the sale, forfeiture or loss of, and shall not
materially interfere with the disposition of, any Property or title thereto
or any interest therein or the payment of Rent; and
6.10 Change in Ownership. Amend or modify its organizational
documents or transfer its beneficial ownership to any other Person prior to
Completion except to Lessee or its designee. After Completion, Borrower may,
with Lessee's consent, transfer its beneficial interest to any other Person
subject, however, to such Person's compliance with Section 5.12.
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE
Lender shall not be obligated to make the first advance of the
Project Loan proceeds until all of the conditions set forth in this Section 7
shall have been satisfied.
7.1 Closing Documents. Lender shall have received all the items set
forth in this subsection, in each case in form and substance satisfactory to
Lender:
(a) Taxes. Evidence that all past and current (if then due
and payable) taxes and assessments applicable to the Property or payable by
Borrower have been paid;
(b) Title Insurance Policy. A mortgagee's policy of title
insurance or satisfactory evidence of the Title Company's unconditional
obligation to issue such a policy, dated as the date of the first advance of
the Project Loan. Such policy shall (i) be in the amount of the Project Loan
(or the maximum amount that the title insurance company is permitted by law
to insure, whichever is lower); (ii) insure Lender that the Mortgage creates
a valid Lien on the Property, free and clear of all defects and encumbrances,
except for the Permitted Exceptions; (iii) provide full coverage against
mechanics' liens and against survey exceptions not specified as Permitted
Exceptions; (iv) contain a pending disbursements clause or endorsement in
form and substance satisfactory to Lender and a commitment of the Title
Company to provide notices of title continuation or endorsement sufficient to
enable Lender to determine that title to the Property is satisfactory prior
to Lender's making any subsequent advance of the Project Loan; and (v)
contain such other endorsements and affirmative coverage as Lender may
reasonably request. Lender shall be furnished with copies of all documents
that appear as exceptions in such policy or commitment;
(c) Payment of Title Insurance Premium. Evidence
satisfactory to Lender that all premiums in respect of such title insurance
policy have been paid or will be paid concurrently with the first advance of
the Project Loan;
(d) Survey. A survey of the Land (current to within thirty
(30) days of the date of the first advance of the Project Loan), certified to
Lender and the Title Company by an independent professional licensed land
surveyor satisfactory to Lender, which survey shall be made in accordance
with the Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Title Association and the American
Congress on Surveying and Mapping in 1992. Without limiting the generality of
the foregoing, there shall be surveyed and shown on such survey the
following: (i) the locations of all buildings and other structures, if any,
on the Land and the established building setback lines; (ii) the lines and
the width of streets abutting the Land; (iii) all access and other easements
appurtenant to or necessary or desirable to the use of the Land; (iv) all
roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the Land, whether recorded,
apparent from a physical inspection of the Land or otherwise known to the
surveyor; (v) any party walls with structures on adjoining property any
encroachments on any adjoining property by the building structures and
improvements on the Land; and (vi) if the Land is described by reference to a
filed map, a legend relating the survey to such map;
(e) Availability of Utilities. Letters from local utility
companies or Governmental Authorities stating, or such other evidence
satisfactory to Lender, showing that gas, electric power, sanitary and storm
sewers, water and all other utilities (i) that are necessary and required
during the Construction Period have been completed and/or will be available
in such a manner as to assure Lender that construction will not be impeded by
a lack of utilities and (ii) that are necessary for operation and occupancy
of the Improvements will be completed in such a manner and at such a time as
will assure the opening and operation of the Improvements on or before the
Outside Completion Date;
(f) Hazard Insurance. Policies or certificates of insurance
required by the Lease, accompanied by evidence of the payment of the premiums
for such policies, with mortgagee loss payable endorsements naming Lender as
loss payee;
(g) Flood Insurance. If requested by Lender, a policy of
flood insurance in an amount equal to the lesser of (i) the maximum limit of
coverage available under the National Flood Insurance Act of 1968, as
amended, and (ii) the amount of the Project Loan;
(h) Builder's Risk Insurance. Such builder's risk insurance
as may be required pursuant to the Development Agreement;
(i) Permits. All Permits issued prior to the date of the
Project Loan Advance;
(j) Soil and Geological Report. If requested by Lender, a
soil and geological report, including a summary of soil test borings issued
by a professional engineer satisfactory to Lender;
(k) Opinion of Counsel for Borrower and Lessee. An opinion
of counsel for Borrower and Lessee in form and substance satisfactory to
Lender;
(l) Development Documents. Certified copies of duly
executed counterparts of the Development Agreement, the Development Agency
Agreement and the Architect's Agreement;
(m) Plans and Specifications. A copy of the Plans and
Specifications, satisfactory in form and substance to Lender and Consulting
Professional;
(n) Cost Breakdown. A cost breakdown and schedule for
construction of the Improvements setting forth all items of costs and
expenses and estimating the construction trade schedules required to complete
the construction and equipping of the Improvements;
(o) Project Loan Documents. Duly executed copies of all
Project Loan Documents and a fully executed original Lease;
(p) Construction Budget. A certified copy of the
Construction Budget;
(q) Organizational Documentation. The Organizational
Certificate of Borrower, which shall include, if Borrower is a limited
partnership or a limited liability company, with respect to such entity:
(1) the partnership agreement or limited
liability company agreement, including
all amendments and attachments, certified
by a general partner or member;
(2) the partnership certificate or
certificate of formation, including all
amendments, certified by an official in
whose office it is filed or recorded;
(3) any certificates filed or recorded or
required to be filed or recorded by such
partnership or limited liability company
in the state of its formation and the
state where the Land is located in order
for it to do business in those states;
(4) any consents by other partners or members
required for the borrowing contemplated
by this Agreement and the execution,
delivery and performance of the Project
Loan Documents; and
(5) if requested by Lender, an acknowledgment
by each of the Partners or Members of his
or its continued membership in Borrower;
(r) Borrowing Certificate. A Borrowing Certificate, duly
executed by Borrower and Lessee.
7.2 Accounting. Lender shall have received and approved an
accounting of all expenditures for costs shown on the Construction Budget
incurred prior to the first advance of the Project Loan.
7.3 Representations and Warranties. The representations and
warranties which are contained in the Project Loan Documents or any
certificate, document or financial or other statement furnished under or in
connection with the Project Loan Documents, shall be correct on and as of the
date of the first advance as if made on and as of such date.
7.4 No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to
the advance to be made on such Borrowing Date.
7.5 Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Lender and its counsel.
7.6 Environmental Audit. Lender shall have received an Environmental
Audit in form and substance acceptable to Lender, provided that such
Environmental Audit shall be delivered to Lender not less than five (5)
Business Days prior to the Property Closing Date.
7.7 Developer Equity. Lender shall be satisfied that the Lessor
shall have contributed on the relevant Borrowing Date an amount equal to the
Developer Equity associated with such Project Loan Advance.
7.8 Acquisition of Property. Borrower will be using all or the
applicable portion of such proceeds to acquire fee title or a valid leasehold
interest in the Land.
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
8.1 All Subsequent Advances. Lender shall not be obligated to make
any Project Loan Advance subsequent to the initial advance until all of the
conditions set forth in this subsection shall have been met to Lender's
satisfaction.
(a) Satisfactory Title. The Security Documents shall
constitute a valid lien on the Property for the full amount of the Project
Loan advanced to and including such date, free and clear of all Liens except
for Permitted Exceptions. Lender shall have been furnished with a notice of
title continuation or an endorsement to the title insurance policy issued to
Lender in connection with the first advance of the Project Loan, which
continuation or endorsement shall state that since the last disbursement of
the Project Loan there have been no changes in the state of title to the
Property.
(b) No Other Security Interests. All materials and fixtures
incorporated in the construction of the Improvements shall have been
purchased so that their absolute ownership shall have vested in Borrower
immediately upon delivery to the Land and Borrower shall have produced and
furnished, if required by Lender, the contracts, bills of sale or other
agreements under which title to such materials and fixtures is claimed.
(c) Statement of Expenditures. If requested by Lender,
Lender shall have received a statement of Borrower and any contractor or
subcontractor, in form and substance satisfactory to Lender, setting forth
the names, addresses and amounts due or to become due as well as the amounts
previously paid to every contractor, subcontractor, and supplier furnishing
materials for or performing labor on the construction of any part of the
Improvements.
(d) Representations and Warranties. The representations and
warranties contained in any of the Project Loan Documents or any certificate,
document or financial or other statement furnished under or in connection
with the Project Loan Documents, shall be correct on and as of the Borrowing
Date for such advance as if made on and as of such date.
(e) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or result from the
advance to be made on such Borrowing Date; provided, however, if a Default or
an Event of Default has occurred under Sections 10.1(b), 10.1(d), 10.1(f) or
10.1(i), so long as no Lease Event of Default has occurred and is continuing,
Lender will continue to make Project Loan Advances to Borrower in accordance
with the terms and conditions of this Agreement; provided, further, however,
Lender shall not be obligated to make Project Loan Advances if such Default
or Event of Default threatens the lien priority of the Mortgage or the right
of Lender to receive payments of Rent under the Assignment of Lease.
(f) Construction Progress. In the case of advances to pay
costs of constructing and equipping of the Improvements, at Lender's option,
Lender shall have received and approved a draw request signed by the
Developer, satisfactory in form and substance to Lender, with appropriate
insertions, accompanied by true copies of unpaid invoices, receipted bills
and lien waivers, and such other supporting information as Lender may
request.
(g) Soft Costs. In the case of advances to pay the costs
included in the Construction Budget that are not among the costs described in
the preceding paragraph, Lender shall have received such evidence as it may
require that such costs have been properly incurred and are due and payable.
(h) Evidence of Compliance. All instruments relating to
each advance and all actions taken on or prior to each advance in connection
with the performance of the Project Loan Documents shall be satisfactory to
Lender, and Lender shall have been furnished with such documents, reports,
certificates, affidavits and other information, in form and substance
satisfactory to Lender, as Lender may require to evidence compliance with all
of the provisions of the other Project Loan Documents.
(i) Lien Waivers. Borrower shall have furnished to Lender
lien waivers in form and substance satisfactory to Lender from such
contractors, subcontractors, suppliers and materialmen as Lender may specify,
evidencing that they have been paid in full for all work performed or
materials supplied to the date of Borrower's request for such advance, except
for retentions provided for in this Agreement.
(j) Agreements. Each of the Development Documents and the
Lease shall be in full force and effect and there shall exist no uncured
default by any party under the Development Documents or the Lease (provided
that performance by Lessee under the Completion Guaranty shall be deemed for
the purposes of this subsection 8.1(j) to have cured any default under the
Development Documents or related default under the Lease).
(k) Damage or Injury. The Improvements shall not have been
materially damaged by fire or other casualty unless there shall have been
received, by Lender or a person approved by Lender, insurance proceeds
sufficient in the sole judgment of Lender and the Consulting Professional, to
effect satisfactory restoration and completion of the Improvements on or
before the Outside Completion Date.
(l) Taxes. If requested by Lender, Lender shall have
received evidence that all past and current (if then due and payable) taxes
and assessments applicable to the Property or payable by Borrower in
connection with the Property have been paid.
(m) Waived Conditions. If requested by Lender, all
conditions waived with respect to the initial advance or any subsequent
advance shall be met.
(n) Borrowing Certificate. Lender shall have received a
Borrowing Certificate dated the date of such advance.
(o) Cost Overruns. Lender shall have received a certificate
of the Developer, acknowledged by Lessee, indicating that the cost to
complete the construction of the Property in accordance with the Plans and
Specifications is expected to be less than or equal to 150% of the amounts
shown on the initial Construction Budget.
(p) Developer Equity. Lender shall be satisfied that the
Lessor shall have contributed on the relevant Borrowing Date an amount equal
to the Developer Equity associated with such Project Loan Advance.
8.2 Completion of Improvements. The Improvements shall not be deemed
completed for purposes of this Agreement until all of the conditions set
forth in this subsection shall have been satisfied.
(a) The Improvements shall have been completed in
accordance with the Plans and Specifications and the Development Agreement
and accepted by Lessee.
(b) Lender shall have received the following, in each case
in form and substance satisfactory to Lender:
(i) evidence of the approval by all
appropriate Governmental Authorities of
the Improvements as being complete as to
construction;
(ii) the certification of the Architect and of
any Consulting Professional that the
Improvements have been completed
substantially in accordance with the
Plans and Specifications, that direct
connection has been made to all
appropriate utility facilities and that
the Improvements are ready for occupancy;
and
(iii) a perimeter survey showing the completed
Improvements, all easements on and
appurtenant to the Property and the
location of access to the Land and all
utility and water easements directly
affecting the Land, with a certification
that the Improvements do not encroach on
any other property that no buildings,
other structures or appurtenances on
other property encroach on the Land and
that all set-back requirements have been
complied with.
SECTION 9. MATTERS RELATING TO PAYMENTS AND COLLATERAL
9.1 The Account.
(a) Lender shall establish an account (the "Account") into
which Lender shall deposit all payments, receipts and other consideration of
any kind whatsoever received by Lender pursuant to the Assignment of Lease or
otherwise.
(b) Except as otherwise provided in Section 9.2, payments
deposited from time to time in the Account shall be paid out as follows:
(i) An amount equal to any payment identified
by Lessee as Project Loan Basic Rent
shall be paid out of the Account by
Lender on the date received, and shall be
applied to the payment of the interest
then due and payable on the Project Loan
until such amounts are paid in full.
(ii) An amount equal to any payment identified
by Lessee as a payment which is the
proceeds of any title insurance policy
(excluding any payments in respect
thereof which are payable to Lessee in
accordance with the Lease) shall be paid
out of the Account by Lender promptly
after receipt, and shall be applied on
the date deposited in the Account, first,
to the payment of principal and interest
on the Project Loan until such amounts
are paid in full, second, to the payment
to Borrower of an amount equal to the
Developer Yield and the Developer Equity
until such amounts are paid in full and,
third, the remainder, if any, shall
be paid to such Person or Persons as
Borrower may designate.
(iii) An amount equal to any such payment
identified by Lessee as a payment in
respect of the Termination Value pursuant
to Section 17.1 of the Lease shall be
paid out of the Account by Lender
promptly after receipt, and shall be
applied on the date deposited in the
Account, first, to the payment of
principal and interest on the Project
Loan until such amounts are paid in full,
second, to the payment to Borrower of an
amount equal to the Developer Yield and
the Developer Equity until such amounts
are paid in full and, third, the
remainder, if any, shall be paid to such
Person or Persons as Borrower may
designate.
(iv) An amount equal to any such payment
identified by Lessee as proceeds of the
sale of any Property pursuant to Article
XXI of the Lease ("Net Sale Proceeds")
shall be paid out of the Account by
Lender promptly after receipt, and shall
be applied on the date deposited in the
Account, first, to the payment of the
principal of the Project Loan then
outstanding, second, to the payment to
Borrower of an amount not to exceed the
outstanding the Developer Equity, and,
third, the remainder of such amount
("Excess Sale Proceeds") shall be
deposited with Lender in escrow to secure
the obligations of Lessee and other
Lessees under other leases of real
property.
(v) An amount equal to any payment identified
by Lessee as the Maximum Residual
Guarantee Amount (as defined in the
Lease) shall be paid out of the Account
by Lender promptly after receipt, and
shall be applied on the date deposited in
the Account to the payment only of
principal of the Project Loan then
outstanding.
(vi) Intentionally Deleted.
(vii) An amount equal to any such payment
identified by Lessee as Supplemental Rent
(as defined in the Lease) (but, so long
as an Event of Default has not occurred
and is continuing, excluding all Excepted
Payments) shall be paid out of the
Account by Lender promptly after receipt,
and shall be applied on the date
deposited in the Account to the payment
of any amounts then owing to Lender.
(viii) An amount equal to any such payment
identified by the Lessor as Excess
Proceeds shall be paid out of the Account
by Lender promptly after receipt, and
shall be applied on the date deposited in
the Account to the payment of any amounts
then owing to Lender.
If Lender receives any payment in lieu of Basic Rent in any case or
proceeding arising under the United States Bankruptcy Code, then such payment
shall be deemed to be a payment on account of Basic Rent for the purpose of
this Section 9.1. In the event that Lessee shall fail to identify the nature
of any payment deposited by it in the Account, or Lender in its reasonable
judgment shall determine that the identification made by Lessee is incorrect
or inappropriate, the nature of such payment shall instead be identified by
Lender in its reasonable judgment and applied in the manner specified above;
provided, that in the event that Lender identifies such payment as an
Excepted Payment, such payment shall be paid out of the Account by Lender to
such Person or Persons as Borrower may designate.
(c) Upon payment in full of the Project Loan and all other
amounts owing by Borrower hereunder or under any other Project Loan Document
and termination of the Project Loan Commitment by Borrower, any moneys
remaining in the Account shall be paid to Borrower or such other Person or
Persons as Borrower may designate.
9.2 Proceeds of Collateral; Proceeds Remaining in Account.
(a) All moneys collected by Lender upon any sale or other
disposition of the Property (including all moneys realized from the exercise
of the Purchase Option and upon the exercise of remedies under the Mortgage),
together with all other moneys received by Lender in connection therewith
(except as otherwise specified in Section 9.1) and (b) all moneys contained
in the Account on the date of an acceleration or on the Maturity Date (if the
Project Loan has not then been repaid in full), or deposited in the Account
thereafter (except as otherwise specified in Section 9.1(c)), shall be
applied as follows:
First, to the payment of (x) any and all sums advanced by
Lender in order to preserve the Collateral or preserve its
security interest therein and (y) the expenses of retaking,
holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any
exercise by Lender of its rights under the Project Loan
Documents, together with attorneys' fees and court costs;
Second, to the payment of the amounts then due and unpaid
for principal of, interest on, and any other amounts then
due and unpaid in respect of the Project Loan;
Third, to the payment to Borrower of the amounts then due
on account of the Developer Yield and an amount sufficient
to return the Developer Equity; and
Fourth, to the extent moneys remain after application
pursuant to clauses First through Third above, to Borrower
or to whomever may be lawfully entitled to receive such
surplus.
9.3 Certain Remedial Matters. Notwithstanding any other provision of
this Agreement or any other Project Loan Document:
(i) except during the continuance of an Event
of Default, Borrower shall, at all times
to the exclusion of Lender, receive all
rights to Excepted Payments due to
Borrower and to demand, collect or
commence an action at law to obtain such
payments and to enforce any judgment with
respect thereto whether against Lessee,
Lender or any other Person; and
(ii) except during the continuance of an Event
of Default, Borrower shall at all times
retain the right, but not to the
exclusion of Lender, (A) to receive from
Lessee all notices, certificates and
other documents and all information that
Lessee is permitted or required to give
or furnish to the "Borrower" or the
"Lessor" pursuant to the Lease, the
Participation Agreement or any other
Operative Agreement, (B) to inspect the
Property, (C) to retain all rights with
respect to insurance that Article XIV of
the Lease specifically confers upon the
"Lessor," (D) to provide such insurance
as Lessee shall have failed to maintain
or as Borrower may desire, (E) to enforce
compliance by Lessee with the provisions
of Articles VIII, X, XI, XII, XIV and
XXXIII of the Lease, and (F) subject to
the other applicable provisions of this
Agreement, to perform for Lessee under
Article XVIII of the Lease.
9.4 Release of the Property, Etc.
(a) If Lessee shall at any time purchase the Property
pursuant to Section 17.2 of the Lease or exercise its Purchase Option with
respect to the Property under Article XXI of the Lease, then upon
satisfaction by Borrower of its obligation to prepay the Project Loans
pursuant to Section 3.3(b) and to pay accrued interest on the Project Loans
so prepaid pursuant to Section 3.2, the Property shall be released from the
Liens created by the Security Documents, all without delivery of any
instrument or performance of any act by any party. In addition, upon payment
in full of the Project Loan and all other amounts owing by Borrower hereunder
or under any other Project Loan Document and termination of the Project Loan
Commitment by Borrower, the Property shall be released from the Liens created
by the Security Documents, all without delivery of any instrument or
performance of any act by any party. Upon request of Borrower following any
such release, Lender shall, at the sole cost and expense of Borrower, execute
and deliver to Borrower or Lessee such documents as Borrower shall reasonably
request to evidence such release.
(b) Notwithstanding anything to the contrary herein, upon
termination of the Project Loan Commitment and upon the payment in full of
(i) the Project Loan and all other amounts owing by Borrower hereunder or
under any other Project Loan Document and (ii) all amounts owing by Lessee to
the Developer or to any other Person under the Operative Agreements, all
remaining moneys in the Account (other than any Excess Sales Proceeds which
shall be held in escrow to secure the obligations of Lessees under other
Leases of Real Property) shall be paid out to Lessee.
SECTION 10. EVENTS OF DEFAULT
10.1 Events of Default. The occurrence of any of the events set
forth in this subsection shall constitute an "Event of Default":
(a) Borrower shall fail to pay any principal of the Project
Loan when due in accordance with the terms thereof or hereof; or Borrower
shall fail to pay any interest on the Project Loan, or any other amount
payable hereunder, within five (5) days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by
Borrower herein or in any other Project Loan Document or which is contained
in any certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any other Project
Loan Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) Construction of the Improvements shall not be Completed
on or before the Outside Completion Date; or
(d) Borrower shall default in the observance or performance
of any agreement contained in this Agreement or any other Project Loan
Document and such failure shall continue unremedied for a period of thirty
(30) days after written notice thereof has been given to Borrower by Lender;
or
(e) (i) Borrower shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Borrower shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower any case,
proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period
of sixty (60) days; or (iii) there shall be commenced against Borrower any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within sixty (60) days from the entry thereof; or (iv) Borrower shall
take any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) Borrower shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered
against Borrower involving in the aggregate a liability (not paid or fully
covered by insurance) of $100,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or
(g) (i) Any of the Project Loan Documents shall cease, for
any reason, to be in full force and effect, or Borrower shall so assert, or
(ii) the Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
(h) The Completion Guarantee shall cease, for any reason,
to be in full force and effect or Lessee shall so assert; or
(i) Except as otherwise expressly provided in Section 6.10,
the entire outstanding equity interest in Borrower shall cease to be owned by
those individuals and entities set forth on Schedule A to the Organizational
Certificate of Borrower; or
(j) The Lease shall cease, for any reason, to be in full
force and effect or Lessee shall so assert; or
(k) A Lease Event of Default shall have occurred and be
continuing; or
(l) A Credit Agreement Event of Default shall have occurred
and be continuing.
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of Section 10.1(e), automatically the Project
Loan Commitment shall immediately terminate and the Project Loan (with
accrued interest thereon) and all other amounts owing under this Agreement
and the other Project Loan Documents shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) Lender may by notice to Borrower
declare the Project Loan Commitment to be terminated forthwith, whereupon the
Project Loan Commitment shall immediately terminate; and (ii) Lender may by
notice to Borrower, declare the Project Loan (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Project Loan
Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
10.2 Lender's Right to Apply Project Loan Proceeds. During the
continuance of an Event of Default, Lender shall have the right, but not the
obligation, to disburse and directly apply Project Loan proceeds to satisfy
Borrower's obligations. Borrower hereby authorizes Lender during the
continuance of any Event of Default to hold, use, disburse and apply advances
of the Project Loan for costs incurred in developing, constructing and
equipping the Improvements, payment or performance of obligations of Borrower
under the Project Loan Documents (including payment of interest on the
Project Loan) and preservation and protection of the Collateral. Such
disbursements shall be deemed advances of the Project Loan for all purposes
and shall be secured by the Security Documents.
10.3 Lender's Right to Complete. Upon the occurrence of any Lease
Event of Default or a default by Lessee under the Completion Guarantee, in
addition to any other remedies which Lender may have pursuant to the Project
Loan Documents, or as provided by statute or rule of law, Lender may enter
upon the Land and construct, equip and complete the Improvements in
accordance with the Plans and Specifications with such changes in the Plans
and Specifications as Lender may from time to time deem appropriate, all at
the risk, cost and expense of Borrower. Lender shall have the right at any
and all times to discontinue any work commenced by it in respect of the
Improvements or to change any course of action undertaken by it and shall not
be bound by any limitations or requirements of time whether set forth in this
Agreement or otherwise. Lender shall have the right and power, but shall not
be obligated, to assume Borrower's interest under any contract made by or on
behalf of Borrower in any way relating to the Improvements or the
construction of the Improvements and to take over and use all or any part or
parts of the labor, materials, supplies and equipment contracted for by or on
behalf of Borrower, whether or not previously incorporated into the
Improvements, all in the sole and absolute discretion of Lender. In
connection with any construction of the Improvements undertaken by Lender
pursuant to the provisions of this subsection, Lender may (i) engage
builders, contractors, architects, engineers and others for the purpose of
furnishing labor, materials and equipment in connection with any construction
of the Improvements, (ii) pay, settle or compromise all bills or claims which
may become Liens against the Property, or any part of the Property, or which
have been or may be incurred in any manner in connection with the
construction, completion and equipping of the Improvements or for the
discharge of Liens or defects in the title of the Property, or any part of
the Property, and (iii) take such other action (including the employment of
watchmen to protect the Property) or refrain from acting under this
Agreement, as Lender may in its sole and absolute discretion from time to
time determine without any limitation whatsoever. Borrower shall be liable to
reimburse Lender for all sums paid or incurred for the construction,
completion and equipping of the Improvements, whether such sums shall be paid
or incurred pursuant to the provisions of this subsection or otherwise. At
Lender's option, all such sums shall be treated as advances of the Project
Loan for all purposes or as demand obligations of Borrower, bearing interest
at the non-default interest rate provided in the Project Loan Note plus 4%
from the date of payment by Lender to the date of repayment by Borrower. All
of the foregoing amounts, including interest, shall be deemed to constitute
advances under this Agreement, be evidenced by the Project Loan Note and
secured by the Security Documents. Upon the occurrence of any Lease Event of
Default or a default by Lessee under the Completion Guaranty, the rights,
powers and privileges provided in this subsection and all other remedies
available to Lender under this Agreement or by statute or by rule of law may
be exercised by Lender at any time and from time to time whether or not the
Project Loan shall be due and payable, and whether or not Lender shall have
instituted any foreclosure or other action for the enforcement of the
Security Documents or the Project Loan Note.
10.4 Power of Attorney. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted in
Section 10.3 above, Borrower hereby irrevocably constitutes and appoints
Lender its true and lawful attorney-in-fact to execute, acknowledge and
deliver any instruments and do and perform any acts such as are referred to
in this subsection in the name and on behalf of Borrower. This power of
attorney is a power coupled with an interest and cannot be revoked.
SECTION 11. MISCELLANEOUS
11.1 No Waivers. The making of a Project Loan Advance shall not
constitute a waiver of any of the conditions of Lender's obligation to make
further advances. No waiver of any such condition shall constitute a waiver
of any Default or Event of Default related to or predicated upon such
condition. Any advance made by Lender and any sums expended by Lender
pursuant to the Project Loan Documents shall be deemed to have been made
pursuant to this Agreement, notwithstanding the existence of an uncured
Default or Event of Default. No advance of the Project Loan at a time when an
Event of Default exists, whether or not Lender had actual knowledge of such
default, shall constitute a waiver of any right or remedy of Lender existing
by reason of such Event of Default, including, without limitation, the right
to accelerate the maturity of the Project Loan or to foreclose the Lien of
the Security Documents or to refuse to make further Project Loan Advances.
11.2 Lender and Lessee as Sole Beneficiaries. All conditions of the
obligation of Lender to make Project Loan Advances are imposed solely and
exclusively for the benefit of Lender and Lessee and their respective assigns
and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that
Lender will refuse to make advances in the absence of strict compliance with
any or all such terms and no Person shall, under any circumstances, be deemed
to be a beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by Lender at any time if in its sole discretion
Lender deems such waiver to be advisable. Lender's obligation to make
advances of the Project Loan, subject to the terms and conditions of this
Agreement, is solely for the benefit of Borrower and Lessee and no other
Person shall be deemed to be a beneficiary of such obligation nor entitled to
require any advance of Project Loan proceeds. Inspections and approvals of
the Plans and Specifications and the Improvements and the workmanship and
materials used in the construction of the Improvements shall impose no
responsibility or liability of any nature whatsoever on Lender, and no Person
shall, under any circumstances, be entitled to rely upon such inspections and
approvals by Lender for any reason. Lender's sole obligation under this
Agreement is to make the advances if and to the extent required by this
Agreement.
11.3 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case of delivery
by hand, when delivered, (b) in the case of delivery by mail, three (3) days
after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows, or to such other address as may be hereafter notified
by the respective parties hereto:
Borrower: Agree-Columbia Crossing Project, L.L.C.
31850 Northwestern Highway
Farmington Hills, MI 48334
Attention: Richard Agree
Facsimile: (248) 737-9110
with a copy to: Sommers, Schwartz, Silver & Schwartz, P.C.
2000 Town Center, Suite 900
Southfield, Michigan 48075
Attention: Leon Schurgin, Esq.
Facsimile: (248) 746-4001
Lender: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Department
Facsimile: (302) 651-1576
Lessee: Borders, Inc.
100 Phoenix Drive
Ann Arbor, MI 48108
Attention: Real Estate Department
Facsimile: (734) 477-1370
with a copy to: Conlin, McKenney & Philbrick, P.C.
350 South Main Street
Ann Arbor, Michigan 48104
Attention: Phillip J. Bowen, Esq.
Facsimile: (734) 761-1637
provided that any notice, request or demand to or upon Lender shall not be
effective until received.
11.4 Modifications. Any provision of this Agreement may be changed,
waived or terminated only by an instrument in writing signed by the party
against whom enforcement of the change, waiver or termination is sought.
11.5 Rights Cumulative. All rights, powers and remedies given to
Lender under this Agreement are cumulative and not alternative, and are in
addition to all rights, powers and remedies otherwise afforded Lender (all
rights, powers and remedies of Lender collectively, "Lender's Rights"); any
forbearance or delay by Lender in exercising any of Lender's Rights shall not
be deemed to be a waiver, and the exercise or partial exercise of any of
Lender's Rights shall not preclude the further exercise of any of Lender's
Rights which shall continue in full force and effect until specifically
waived by an instrument in writing executed by Lender. All representations,
warranties and covenants contained in any of the Project Loan Documents shall
survive the making of the advances of the Project Loan.
11.6 Schedules. The Schedules attached to this Agreement are
essential to and are made a part of this Agreement.
11.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
11.8 Waiver of Jury Trial, Submission to Jurisdiction. Borrower
IRREVOCABLY WAIVES TRIAL BY JURY AND ANY OBJECTIONS, INCLUDING WITHOUT
LIMITATION ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR IN THE FUTURE HAVE TO THE BRINGING
OF ANY SUCH ACTION OR PROCEEDING IN ANY JURISDICTION. All judicial actions,
suits or proceedings brought against Borrower and its property with respect
to its obligations, liabilities or any other matter under or arising out of
or in connection with this Agreement or any other Project Loan Document or
for recognition or enforcement of any judgment rendered in any such
proceedings may be brought in any trial or appellate state or federal court
of competent jurisdiction in The City of New York. By execution and delivery
of this Agreement, Borrower accepts, generally and unconditionally, the
non-exclusive jurisdiction of such courts and irrevocably waives, and agrees
not to plead or claim, any objection that it may ever have to the venue of
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court. Borrower irrevocably agrees
that all process in any proceeding or any court arising out of or in
connection with this Agreement or any of the other Project Loan Documents,
may be effected by mailing to Borrower a copy by registered or certified mail
or any substantially similar form of mail, postage prepaid, to Borrower at
its address set forth in subsection 11.3 or at such other address of which
Lender shall have been notified in accordance with the terms of such
subsection. Such service shall be effective five (5) days after such mailing.
Such service will be effective and binding service in every respect. Borrower
shall not assert that such service did not constitute effective and binding
service within the meaning of any applicable state or federal law, rule,
regulation or the like. Nothing in this Agreement shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
11.9 Captions. The captions in this Agreement are for convenience of
reference only, and in no way limit or amplify the provisions of this
Agreement.
11.10 Obligations Non-Recourse. Anything to the contrary contained
in this Agreement, the Project Loan Note or in any other Project Loan
Document notwithstanding, neither Borrower, nor any member, partner (general
or limited), officer, director or shareholder of Borrower, nor any member,
partner (general or limited), officer, director or shareholder thereof, nor
any of their respective successors or assigns (all such Persons being
hereinafter referred to collectively as the "Exculpated Persons"), shall be
personally liable in any respect for any representation, warranty, liability
or obligation hereunder or in any other Project Loan Document including the
payment of the principal of, or interest on, the Project Loan Note, or for
monetary damages for the breach of performance of any of the covenants
contained in this Agreement, the Project Loan Note, the Mortgage or any other
Project Loan Document. Lender agrees that, in the event it pursues any
remedies available to it under this Agreement, the Project Loan Note, the
Assignment of Lease, the Mortgage or under any other Project Loan Document,
Lender shall have no recourse against Borrower nor any Exculpated Person, for
any deficiency, loss or claim for monetary damages or otherwise resulting
therefrom and recourse shall be had solely and exclusively only against the
Property; but nothing contained herein shall be taken to prevent recourse
against or the enforcement of remedies against the Property in respect of any
and all liabilities, obligations and undertakings contained in the Mortgage,
this Agreement, the Project Loan Note, the Assignment of Lease or in any
other Project Loan Document. Notwithstanding the provisions of this
paragraph, nothing in the Mortgage, the Assignment of Lease, this Agreement,
the Project Loan Note or any other Project Loan Document shall: (a)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Project Loan Note or arising under the Mortgage or this
Agreement or secured by the Mortgage, but the same shall continue until paid
or discharged; (b) relieve Borrower from liability and responsibility for
(but only to the extent of the damages arising by reason of): (i) active
waste knowingly committed by Borrower with respect to the Property or (ii)
any fraud on the part of Borrower or any such Exculpated Person; (c) relieve
Borrower from liability and responsibility for (but only to the extent of the
moneys misappropriated, misapplied or not turned over): (i) except for
Excepted Payments, misappropriation or misapplication by Borrower (i.e.,
application in a manner contrary to any of the Project Loan Documents) of any
insurance proceeds or condemnation award paid or delivered to Borrower by any
Person other than Lender; or (ii) except for Excepted Payments, any rents or
other income received by Borrower from Lessee that are not turned over to
Lender in accordance with the Assignment of Lease; or (d) affect or in any
way limit Lender's rights and remedies hereunder with respect to the rights
and powers assigned under the Assignment of Lease or to obtain a judgment
against Borrower (provided that no deficiency judgment or other money
judgment shall be enforced against Borrower or any Exculpated Person except
to the extent of Borrower's interest in the Property or to the extent
Borrower may be liable as otherwise contemplated in clauses (b) and (c) of
this Section).
IN WITNESS WHEREOF, this Agreement has been duly executed by Lender
and Borrower as of the date first written above.
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee
By: /s/ Joseph B. Feil
-------------------
Name: Joseph B. Feil
Title: Financial Services Officer
AGREE-COLUMBIA CROSSING, L.L.C.
a Delaware limited liability company
BY: Agree Limited Partnership
a Delaware limited partnership
ITS: Member
By: Agree Realty Corporation
a Maryland corporation
By: /s/ Richard Agree
Name: Richard Agree
Title: President
EXHIBIT A
Legal Description
BEING KNOWN AND DESIGNATED as Parcel No. CC as shown on plat entitled
"Columbia, Route 175 Commercial, Section 1 Area 1, Parcels 'AA' through 'CC'
and Lot 2, a Re-subdivision of Parcels V, Y, Z and Lot 1, Route 175
Commercial as shown on Plat Nos. 12065, 12565 and 13104, which plat is
recorded among the Land Records of Howard County in Plat Book M.D.R.
No. 13550.
BEING part of the same lot of ground which by Deed dated November 14, 1997
and recorded among the Land Records of Howard County in Liber No. 4118 follo
0016 was granted and conveyed by The Howard Research and Development
Corporation, unto HRD Holdings, Inc., which by Articles of Amendment dated
January 5, 1998, became The Howard Research and Development Corporation.
A-1
EXHIBIT B
SITE PLAN
(Graphic Omitted)
B-1
EXHIBIT C
CONSTRUCTION BUDGET
(Attached)
C-1
PROJECT LOAN AGREEMENT
between
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee, as Lender,
and
AGREE-MILESTONE CENTER PROJECT, L.L.C.
---------
Dated as of June 17,1999
---------
TABLE OF CONTENTS
-----------------
PAGE
PRELIMINARY STATEMENT....................................................1
SECTION 1. DEFINITIONS...................................1
1.1 Defined Terms..........................................1
1.2 Construction..........................................12
1.3 Accounting Principles.................................13
SECTION 2. THE PROJECT LOAN.............................14
2.1 Project Loan Commitment...............................14
2.2 Determination of Amounts of Project Loan Advances.....14
2.3 Construction Budget Evaluation........................14
2.4 Reduction of Project Loan Commitment..................15
2.5 Project Loan Advance Requests.........................15
2.6 Project Loan Advances.................................16
2.7 Notes.................................................16
2.8 Interest Rate on Project Loan Advances................16
2.9 Maximum Interest Rate.................................16
2.10 Use of Proceeds.......................................16
2.11 Advances to Pay Interest..............................16
SECTION 3. PAYMENTS.....................................16
3.1 Payments..............................................16
3.2 Interest Payment Dates................................17
3.3 Prepayments...........................................17
3.4 Indemnity.............................................18
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES......18
4.1 Existence; Compliance with Law........................18
4.2 Power; Authorization; Enforceable Obligations.........19
4.3 No Litigation.........................................19
4.4 Consents, Approvals, Authorizations, Etc..............19
4.5 No Legal Bar..........................................19
4.6 Compliance with Building Codes, Zoning Laws, Etc......20
4.7 Ownership of Property; Liens..........................20
4.8 No Default............................................20
4.9 Taxes.................................................20
4.10 Availability of Utilities.............................20
4.11 Permits, Etc..........................................20
4.12 Financial Statements..................................20
4.13 Federal Regulations...................................21
4.14 Investment Company Act; Other Regulations.............21
4.15 Environmental Matters.................................21
4.16 Regulation H..........................................22
4.17 No other Assets.......................................22
SECTION 5. AFFIRMATIVE COVENANTS........................22
5.1 Construction..........................................22
5.2 Correction of Work....................................23
5.3 No Encroachments......................................23
5.4 Certain Notices.......................................23
5.5 Indemnification.......................................24
5.6 Construction Schedule.................................24
5.7 Expenses..............................................24
5.8 Conduct of Business and Maintenance of Existence......24
5.9 Inspection of Property; Books and Records;
Discussions..........................................24
5.10 Compliance with Project Loan Documents................25
5.11 Further Assurances....................................25
5.12 Single Purpose Entity; Separateness...................25
SECTION 6. NEGATIVE COVENANTS...........................27
6.1 Changes in Plans and Specifications...................27
6.2 Change Orders.........................................27
6.3 Changes in Agreements.................................28
6.4 Limitation on Liens...................................28
6.5 Limitation on Contingent Obligations..................28
6.6 Other Activities......................................28
6.7 Ownership of Properties, Indebtedness.................28
6.8 Disposition of Assets.................................29
6.9 Discharge of Liens....................................29
6.10 Change in Ownership...................................29
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE........29
7.1 Closing Documents.....................................29
7.2 Accounting............................................32
7.3 Representations and Warranties........................32
7.4 No Default or Event of Default........................32
7.5 Additional Matters....................................32
7.6 Environmental Audit...................................33
7.7 Developer Equity......................................33
7.8 Acquisition of Property...............................33
SECTION 8. CONDITIONS PRECEDENT TO
SUBSEQUENT ADVANCES........................33
8.1 All Subsequent Advances...............................33
8.2 Completion of Improvements............................35
SECTION 9. MATTERS RELATING TO PAYMENTS
AND COLLATERAL.............................36
9.1 The Account...........................................36
9.2 Proceeds of Collateral; Proceeds
Remaining in Account.................................38
9.3 Certain Remedial Matters..............................39
9.4 Release of the Property, Etc..........................39
SECTION 10. EVENTS OF DEFAULT.....................................40
10.1 Events of Default.....................................40
10.2 Lender's Right to Apply Project Loan Proceeds.........42
10.3 Lender's Right to Complete............................42
10.4 Power of Attorney.....................................43
SECTION 11. MISCELLANEOUS.........................................43
11.1 No Waivers............................................43
11.2 Lender and Lessee as Sole Beneficiaries...............43
11.3 Notices...............................................44
11.4 Modifications.........................................45
11.5 Rights Cumulative.....................................45
11.6 Schedules.............................................45
11.7 Governing Law.........................................45
11.8 Waiver of Jury Trial, Submission to Jurisdiction......45
11.9 Captions..............................................46
11.10 Obligations Non-Recourse................................46
EXHIBITS
EXHIBIT A LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B SITE PLAN
EXHIBIT C CONSTRUCTION BUDGET
[NOTE: Documents referred to in Project Loan Agreement, as being executed on
date of execution of Project Loan Agreement:
1. Lease and Lease Supplement, if applicable
2. Mortgage or Deed of Trust
3. Project Loan Note
4. Assignment of Leases and Rents
5. Development Agreement
6. Development Agency Agreement
7. Assignment of Development Agency Agreement
8. Completion Guarantee (Borders)
9. Organizational Certificate of Borrower
<PAGE>
PROJECT LOAN AGREEMENT
(Germantown, Maryland)
PROJECT LOAN AGREEMENT, dated as of June 17, 1999 (this
"Agreement"), between WILMINGTON TRUST COMPANY, not in its individual
capacity, but solely as Owner Trustee, having an office at 1100 North Market
Street, Wilmington, Delaware 19890 ("Lender"), and AGREE-MILESTONE CENTER
PROJECT, L.L.C., a Delaware limited liability company, having its principal
office at 31850 Northwestern Highway, Farmington Hills, Michigan 48334
("Borrower").
PRELIMINARY STATEMENT
Borrower is the owner of the land located in the City of Germantown,
County of Montgomery and State of Maryland, and more particularly described
in Exhibit A attached hereto and incorporated herein by reference (the
"Land"). Borrower wishes to construct and equip on the Land a building
containing approximately 25,000 square feet of rentable space in the
approximate location depicted on Exhibit B attached hereto and incorporated
herein by reference and any other improvements to be constructed pursuant to
the Development Agreement. In order to acquire the Land and construct the
Improvements, Borrower has requested Lender to provide to Borrower a loan in
the aggregate principal amount of $4,138,247.77 (the "Project Loan").
Subject to the terms and conditions of this Agreement, Lender has
agreed to make the Project Loan to Borrower.
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement the following
terms shall have the meaning given to such term below:
"Account" shall have the meaning specified in Section 9.1.
"Affiliate" with respect to any Person, any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any
class of the voting or other equity interests of such Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. Control,
as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities,
by contract or otherwise, including the power to elect a majority of the
directors or trustees of a corporation or trust, as the case may be.
"Agent" shall mean Bankers Trust Company, a New York banking
corporation.
"Agreement" shall mean this Project Loan Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
"Allocated Interest" shall mean, as of any Interest Payment Date
during the Construction Period, the amount of interest due and payable on
such date with respect to the Project Loan.
"Architect" shall mean such architect or architects as may be
engaged by Borrower from time to time in connection with the Improvements
with Lender's prior written approval.
"Architect's Agreement" shall mean any agreements entered into
between Borrower and the Architect providing for architectural services in
connection with the construction of the Improvements, as it may be amended,
supplemented or otherwise modified from time to time with Lender's prior
written approval.
"Assignment of Development Agency Agreement" shall mean the
Assignment of Development Agency Agreement, dated as of the date hereof made
by Borrower in favor of Lender.
"Assignment of Lease" shall mean the Assignment of Leases and Rents,
dated as of the date hereof made by Borrower in favor of Lender.
"Available Project Loan Commitment" shall mean, at any particular
time, an amount equal to the difference between (a) the amount of the Project
Loan and (b) the aggregate amount of all Project Loan Advances made pursuant
to this Agreement.
"Basic Rent" shall mean, the sum of (i) the Project Loan Basic Rent
and (ii) the Developer Basic Rent, calculated as of the applicable date on
which Basic Rent is due.
"Beneficial Owner" shall have the meaning specified in Section 5.12.
"Borrowing Certificate" shall mean a certificate executed by a
Responsible Officer, delivered to Lender on each Borrowing Date, satisfactory
in form and substance to Lender.
"Borrowing Date" shall mean, with respect to any Project Loan
Advance, the date for the making thereof, which shall be a Business Day.
"Business Day" shall mean any day other than a Saturday or Sunday or
a legal holiday on which commercial banks are authorized or required to be
closed for business in New York, New York.
"Collateral" shall mean all assets of Borrower, now owned or
hereafter acquired, upon which a Lien is purported to be created by the
Security Documents.
"Completion" or "Completed" shall mean, with respect to any
Improvements, such time as substantial completion of such Improvements has
been achieved in accordance with the Plans and Specifications and in
compliance with all material Legal Requirements and Insurance Requirements
and otherwise in accordance with the Development Agreement.
"Completion Guarantee" shall mean Guarantee of Completion, dated as
the date hereof, made by Lessee in favor of Lender.
"Construction Budget" shall mean the budget for the cost of
acquiring the Land and constructing the Improvements attached as Exhibit C
hereto, as it may be amended, supplemented or otherwise modified from time to
time with the prior written approval of Lender and Lessee.
"Construction Budget Deficit" shall have the meaning assigned to
that term in Section 2.3.
"Contingent Obligation" shall mean as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other monetary obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation
or (ii) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss
in respect thereof; provided, however, that the term Contingent Obligation
shall not include (x) endorsements of instruments for deposit or collection
in the ordinary course of business or (y) guarantees made by a Person of the
obligations of a Subsidiary or Affiliate of such Person which do not
constitute Indebtedness of such Subsidiary or Affiliate and are incurred in
the ordinary course of business of such Subsidiary or Affiliate. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in
good faith.
"Construction Period" shall mean the period commencing on the
Property Closing Date for such Property and ending on the earlier to occur of
(a) the Interest Capitalization Termination Date or (b) Completion of such
Property.
"Consulting Professional" shall mean the Agent, or such other
architectural or engineering consultant as Lender may engage from time to
time to examine the Plans and Specifications, changes in the Plans and
Specifications and Construction Budget cost breakdowns and estimates, to make
periodic inspections of the progress on construction of the Improvements on
Lender's behalf and to advise and render reports to Lender.
"Contractual Obligation" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Agreement" shall mean the Amended and Restated Credit
Agreement, dated as of November 22, 1995, and amended and restated as of
October 17, 1997, between Lender, as borrower, PNC Bank, National
Association, as administrative agent, First National Bank of Chicago as
syndication agent, Bankers Trust Company, as real estate administrative
agent, and the lenders party thereto.
"Credit Agreement Event of Default" shall mean any event or
condition defined as an "Event of Default" in Article IX of the Credit
Agreement.
"Credit Agreement Interest Rate" shall mean as of any date of
determination, the weighted average interest rate payable by Lender on
outstanding loans under the Credit Agreement, including, interest payable
under Article IV of the Credit Agreement, expressed as a percentage on an
annualized basis.
"Default" shall mean any of the events specified in the "Events of
Default" subsection, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition has been satisfied.
"Developer" shall mean the person identified as the Developer in the
Development Agreement.
"Developer Basic Rent" shall mean the amount set forth in a Lease as
"Developer Basic Rent."
"Developer Equity" shall mean a portion of the developer's fees
payable by a Lessor as set forth in each Construction Budget equal to 5% of
the Total Property Costs (as defined in the Lease) for a particular Property
or, if there is no Developer with respect to a Project Loan, the equity, in
the amount of 5% of the total funds required by the Lessor on a Borrowing
Date, contributed by the Lessor simultaneously with the funding of such
Project Loan.
"Developer Yield" shall mean 12% of Developer Equity, payable as
Developer Basic Rent under the Lease.
"Development Agency Agreement" shall mean the Development Agency
Agreement, dated as of the date hereof between Borrower and the Developer,
pursuant to which the Developer agrees to assume all of the obligations of
Borrower under the Development Agreement.
"Development Agreement" shall mean the Development Agreement, dated
as of the date hereof between Borrower and Lessee, providing for the
construction and development of the Property.
"Development Documents" shall mean the collective reference to the
Architect's Agreement, the Development Agreement, the Development Agency
Agreement, the Plans and Specifications and the Permits.
"Dollar, Dollars, U.S. Dollars" and the symbol "$" shall mean lawful
money of the United States of America.
"Environmental Laws" shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the
environment or employee safety in the work place.
"Event of Default" shall mean any of the events specified in the
"Events of Default" subsection, provided that any requirement for the giving
of notice, the lapse of time, or both, or any other condition, has been
satisfied.
"Excepted Payments" shall mean:
(a) all indemnity payments (including indemnity payments
made pursuant to Section 13 of the Participation Agreement), whether made by
adjustment to Developer Basic Rent or otherwise, to which Lender, the Trust
Company, the Investor, or any of their respective Affiliates, agents,
officers, directors or employees is entitled;
(b) any amounts (other than Project Loan Basic Rent,
Termination Value, or Purchase Option Price) payable under any Operative
Agreement to reimburse Lender, the Trust Company, the Investor, or any of
their respective Affiliates (including the reasonable expenses of Lender, the
Trust Company, the Investor, or any of their Affiliates incurred in
connection with any such payment) for performing or complying with any of the
obligations of any of Lessees under and as permitted by any Operative
Agreement;
(c) any amount payable to the Investor by any transferee of
the interest of the Investor as the purchase price of the Investor's interest
in the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to
risks self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable to the Agent;
(e) any insurance proceeds under policies maintained by
Lender, the Trust Company, or the Investor other than such proceeds or
payments payable to the Agent;
(f) Transaction Expenses or other amounts or expenses paid
or payable to or for the benefit of Lender, the Trust Company or the
Investor;
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above; and
(h) any rights of the Investor, Lender, or the Trust
Company to demand, collect, sue for or otherwise receive and enforce payment
of any of the foregoing amounts.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by Lessee pursuant
to Article XVII of the Lease with respect to such Casualty or Condemnation.
"Excess Sale Proceeds" shall have the meaning specified in Section
9.1(b)(iv).
"Fixtures" shall mean all fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"Force Majeure Delay" shall mean any cause or event which is beyond
the reasonable control and not due to the fault or negligence of Borrower,
which delays, prevents or prohibits the Developer's construction of the
Improvements including without limitation, acts of God or the elements, fire,
strikes, labor disputes, delays in delivery of material and disruption of
shipping; provided, however, any such cause or event shall be deemed not to
be a Force Majeure Delay if Borrower shall fail to give Lender written notice
at the beginning of such delay as required under the Development Agreement.
"GAAP" shall mean generally accepted accounting principles as are in
effect from time to time.
"Governmental Authority" shall mean the United States of America,
any state and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality or any of them, now existing or subsequently created.
"Improvements" shall mean the improvements existing on the Land and
all improvements to be constructed on the Land and certain ancillary off-site
improvements, if any, to be constructed outside the Land, each in accordance
with the Plans and Specifications and the Development Agreement.
"Indebtedness" shall mean as to any Person at a particular time, (a)
indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which such Person is liable, contingently
or otherwise, as obligor, guarantor or otherwise and (b) obligations under
leases which shall have been or should be, in accordance with GAAP, recorded
as capital leases in respect of which obligations such Person is liable,
contingently or otherwise, or in respect of which obligations such Person
assures a creditor against loss.
"Independent Director" shall mean a Person which is a director among
the board of directors of the managing member or general partner, as
applicable, of Borrower which is reasonably satisfactory to Lenders who shall
not have been at the time of such individual's appointment or at any time
thereafter, and may not have been at any time during the preceding two years
(i) a shareholder of, or an officer, director, partner or employee of,
Borrower or any of its shareholders, subsidiaries or affiliates, (ii) a
substantial creditor, customer of, or supplier to, Borrower or any of its
shareholders, subsidiaries or affiliates, (iii) a Person or other entity
controlling or under common control with any such shareholder, partner,
supplier or customer, or (iv) a member of the immediately family of any such
shareholder, officer, director, partner, employee, supplier or customer. As
used herein, the term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person or entity, whether through ownership of voting securities, by
contract or otherwise.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by Lessee or
required by the Development Agency Agreement to be maintained by the
Developer, and all requirements of the issuer of any such policy.
"Interest Capitalization Termination Date" shall mean the date which
occurs 24 months subsequent to the Property Closing Date.
"Interest Payment Date" shall mean each date specified for the
payment of interest in Section 3.2.
"Investor" shall mean Sam Project Funding Corp. I., a Delaware
corporation.
"Land" shall have the meaning specified in the Preliminary Statement.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling,
order, injunction, writ, decree or award of any Official Body.
"Lease" shall mean the Lease, dated as of the date hereof, between
Lessee and Borrower with respect to the Property, as the same may be
supplemented by a Lease Supplement.
"Lease Event of Default" shall have the meaning given to such term
in Section 18.1 of the Lease.
"Lease Supplement" shall have the meaning given to such term in
Section 2.1 of the Lease, if applicable.
"Legal Requirements" shall mean all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations and requirements of every Governmental Authority having
jurisdiction over the Land, the Improvements or Borrower, and all covenants,
restrictions and conditions now or in the future applicable to the Land or
the Improvements.
"Lessee" shall mean Borders, Inc., a Colorado corporation.
"Lessor Liens" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor
or the Developer, (b) any act or omission of the Lessor or the Developer
which is not required by the Project Loan Documents or is in violation of any
of the terms of the Project Loan Documents, (c) any claim against the Lessor
or the Developer with respect to the Property against which Lessee is not
required to indemnify Lessor or the Developer or (d) any claim against the
Lessor or the Developer arising out of any transfer by the Lessor of all or
any portion of the interest of the Lessor in the Property, other than the
transfer of title to or possession of the Property by Lessor pursuant to and
in accordance with the Lease or the Project Loan Agreement or pursuant to the
exercise of the remedies set forth in Article XVIII of the Lease.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Maturity Date" shall mean October 16, 2002, as such date may be
extended pursuant to the Credit Agreement.
"Modifications" shall have the meaning specified in Section 12.1 of
the Lease.
"Mortgage" shall mean the Mortgage or Deed of Trust, as applicable,
dated as of the date hereof, made by Borrower in favor of Lender.
"Net Sale Proceeds" shall have the meaning specified in Section
9.1(b)(iv).
"Obligation" shall mean any obligation or liability of Borrower to
Lender, however created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or hereafter existing, or due or to become due,
under or in connection with this Agreement or any other Project Loan
Document.
"Official Body" shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Operative Agreements" shall have the meaning assigned to such term
in the Lease.
"Organizational Certificate of Borrower" shall mean the certificate
executed by Borrower and delivered to Lender at the time of execution and
delivery of this Agreement by Borrower.
"Outside Completion Date" shall mean a date one month prior to the
Maturity Date.
"Permits" shall mean all consents, licenses and building permits
required for construction, completion, occupancy and operation of the
Improvements in accordance with all Legal Requirements affecting the
Property.
"Permitted Exceptions" shall mean those exceptions to title of the
Property set forth in the mortgagee title insurance policy issued to Lender
by the Title Company.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plans and Specifications" shall mean the plans and specifications
for the construction of the Improvements, including, without limitation,
installation of curbs, sidewalks, gutters, landscaping, utility connections
(whether located on or off the Land) and all fixtures and equipment necessary
for construction, operation and occupancy of the Improvements, prepared or to
be prepared by the Architect, and approved in writing by Lender, as such
plans and specifications may be amended, supplemented or otherwise modified
from time to time with Lender's prior written approval.
"Principal Office" shall mean the main lending office of Bankers
Trust Company in New York, New York.
"Project Cost" shall mean the cost to the Lessor to construct any
Improvements, Fixtures or Modifications to be used on the Property in
accordance with the Plans and Specifications and the Operative Agreements.
"Project Loan" shall have the meaning set forth in the Preliminary
Statement.
"Project Loan Advance" shall mean each disbursement of the Project
Loan pursuant to Section 2.6 hereof.
"Project Loan Basic Rent" shall mean an amount equal to the interest
due on the Project Loan on any Specified Interest Payment Date pursuant to
the Project Loan Agreement.
"Project Loan Commitment" shall mean Lender's obligation to advance
the Project Loan to Borrower in accordance with the terms of this Agreement.
"Project Loan Documents" shall mean the collective reference to this
Agreement, the Project Loan Note, the Security Documents and all other
documents and instruments from time to time evidencing or securing the
Project Loan.
"Project Loan Note" shall have the meaning specified in Section 2.7.
"Property" shall mean the collective reference to the Land and the
Improvements.
"Property Acquisition Cost" shall mean the cost to Lessor to
purchase the Property.
"Property Closing Date" shall mean each date on which a Lessor
purchases or ground leases the Property.
"Purchase Option" shall have the meaning given to such term in
Section 21.1 of the Lease or in the Three Party Agreement.
"Regulated Substances" shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive
material, refuse, garbage, wastes, chemicals, petroleum products,
by-products, co products, impurities, dust, scrap, heavy metals, any
substance defined as a "hazardous substance," "pollutant," "pollution,"
"contaminant," "hazardous or toxic substance," "extremely hazardous
substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial
waste," "residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," "regulated
substance" or any related materials, substances or wastes as now or hereafter
defined pursuant to any Environmental Laws, the generation, manufacture,
extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
"Rent" shall have the meaning given to such term in Section 3.4 of
the Lease.
"Requisition" shall have the meaning specified in Section 2.5.
"Responsible Officer" shall mean Richard Agree, or such other
individual as shall be named by a Responsible Officer by notice to Lender.
"Security Documents" shall mean the collective reference to the
Mortgage, the Assignment of Lease and consent thereto, the Completion
Guaranty, the Assignment of Development Agency Agreement and the consent
thereto and all other documents from time to time securing the Indebtedness
evidenced by the Project Loan Note.
"SPC Member" shall have the meaning described in Section 5.12.
"Subsidiary" of any Person shall mean any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of:
(i) the outstanding capital stock having voting power to elect
a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might
having voting power upon the occurrence of any
contingency),
(ii) the interest in the capital or profits of such partnership
or joint venture, or
(iii) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person
and one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Taxes" shall have the meaning given to such term in the Lease.
"Three Party Agreement" shall mean that certain agreement of even
date herewith entitled "Three Party Agreement" and executed by Agree Limited
Partnership, a Delaware limited partnership, Borrower and Lessee.
"Title Company" shall mean Chicago Title Insurance Company, together
with such reinsurers or coinsurers of such title company or companies, or
such other title companies as may be approved by Lender.
"Total Property Costs" shall mean the sum of Project Cost and
Property Acquisition Cost.
"Transaction Expenses" shall mean all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Agreements and the transactions contemplated by the Operative Agreements
including:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative Agreements
and the other transaction documents, preparing for the closings under, and
rendering opinions in connection with, such transactions and in rendering
other services customary for counsel representing parties to transactions of
the types involved in the transactions contemplated by the Operative
Agreements;
(b) any other reasonable fee, out-of-pocket expenses,
disbursement or cost of any party to the Operative Agreements or any of the
other transaction documents; and
(c) any and all Taxes and fees incurred in recording or
filing any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement with
any public office, registry or governmental agency in connection with the
transactions contemplated by the Operative Agreements.
1.2 Construction. Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Project Loan Documents:
(a) references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the
phrase "including without limitation";
(b) references to "determination" of or by Lender shall be
deemed to include good faith estimates by Lender (in the case of quantitative
determinations) and good faith beliefs by Lender (in the case of qualitative
determinations) and such determination shall be conclusive absent manifest
error;
(c) whenever Lender is granted the right herein to act in
its sole discretion or to grant or withhold consent such right shall be
exercised in good faith;
(d) the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Project Loan Document refers to
this Agreement or such other Project Loan Document as a whole and not to any
particular provision of this Agreement or such other Project Loan Document;
(e) the section and other headings contained in this
Agreement or such other Project Loan Document and the Table of Contents
preceding this Agreement or such other Project Loan Document are for
reference purposes only and shall not control or affect the construction of
this Agreement or such other Project Loan Document or the interpretation
thereof in any respect;
(f) article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Project Loan Document, as
the case may be, unless otherwise specified;
(g) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement or other Project Loan Document, as
the case may be, and reference to a Person in a particular capacity excludes
such Person in any other capacity;
(h) reference to any agreement (including this Agreement
and any other Project Loan Document together with the schedules and exhibits
hereto or thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated;
(i) relative to the determination of any period of time,
"from" means "from and including," "to" means "to but excluding" and
"through" means "through and including"; and
(j) references to "shall" and "will" are intended to have
the same meaning.
1.3 Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP;
provided, that if any change in GAAP or the application thereof occurs
hereafter, or if Lessee adopts a change to its accounting principles or
methods with the agreement of its independent certified public accountants,
and such change results in a change in the calculation of any financial
covenant or restriction set forth herein, then the parties hereto agree to
enter into and diligently pursue negotiations in order to amend such
financial covenant or restriction so as to equitably reflect such change,
with the desired result that the criteria for evaluating the financial
condition and results of operations of Lessee shall be the same after such
change as if such change had not been made. Pending the resolution of any
such negotiations, Lessee agrees to provide to Lender such unaudited
financial information and pro forma statements using the accounting methods
and principles used in the preparation of the audited financial statements
for the fiscal year ended January 26, 1997, as are necessary to enable Lender
to test any financial covenants contained herein.
SECTION 2. THE PROJECT LOAN
2.1 Project Loan Commitment. Subject to the terms and conditions of
this Agreement and relying upon the representations and warranties herein set
forth, Lender agrees to make the Project Loan to Borrower from time to time
on any Borrowing Date on or after the date hereof to, but not including, the
day which is one month prior to the Maturity Date in an aggregate principal
amount not to exceed at any one time the Project Loan Commitment.
2.2 Determination of Amounts of Project Loan Advances.
(a) Disbursements for costs of acquiring the Land and for
costs of developing, constructing and equipping the Improvements included in
the Construction Budget, shall be made as such costs are incurred in such
amounts as shall be determined by Lender, based upon certifications of
Borrower and the Consulting Professional and such other evidence as may be
required by Lender, less a retention of 10% of the costs attributable to
construction of the Improvements until the Improvements have been completed;
provided, however, that after 50% of the work of constructing the
Improvements has been completed, Lender, with Lessee's consent, may determine
that satisfactory progress is being made and may disburse the full amount of
such costs as such costs are incurred or may impose a reduced retention; and
provided further than when the Improvements or any part of the Improvements
identified as a separate line item on the Construction Budget have been
Completed, Lender, with Lessee's consent, may release and disburse that
portion of the retention with respect to such line item which may be
determined by Lender to be in excess of the requirements for Lender's
protection. Upon final completion of the work performed by any subcontractor
(as determined by Lender in its sole discretion), Lender shall release that
portion of the retention allocated to the work performed by such
subcontractor in accordance with the Construction Budget.
(b) Disbursements for any other costs related to the
Property included in the Construction Budget shall be made as such costs are
incurred, in such amounts as shall be determined by Lender, based upon
certifications of Borrower and such other evidence as may be required by
Lender.
2.3 Construction Budget Evaluation. If Lender determines at any time
that the portion of the Available Project Loan Commitment allocated to any
line item of the Construction Budget or otherwise is not sufficient to pay
the cost of completing construction of such line item or the Improvements, or
in the case of the line item for interest, to pay interest on the Project
Loan during the Construction Period (any such deficiency, a "Construction
Budget Deficit"), Lender may, in its sole discretion, stop making Project
Loan Advances and Borrower shall deposit with Lender additional funds from
some other source in an amount equal to the Construction Budget Deficit. Sums
so deposited with Lender shall be applied to pay costs of any line item or
line items as to which the Construction Budget Deficit exists before Lender
advances proceeds of the Project Loan to pay such costs.
2.4 Reduction of Project Loan Commitment. So long as no Construction
Budget Deficit occurs as a result thereof, Borrower shall have the right at
any time and from time to time upon five (5) Business Days' prior written
notice to Lender to permanently reduce or to terminate the Project Loan
Commitment without penalty or premium (except for any breakage fees payable
under the Credit Agreement resulting from such reduction or termination)
provided that any such reduction or termination shall be accompanied by
prepayment of the Project Loan to the extent necessary to reduce the
outstanding amount of Project Loan Advances to an amount equal to or less
than the Project Loan Commitment, as so reduced, together with the full
amount of interest and fees accrued on the principal sum to be prepaid.
2.5 Project Loan Advance Requests.
(a) Except as otherwise provided herein, Borrower may on
the fifteenth or thirtieth day of each calendar month or on such other dates
as permitted by Lessee (or, if such days are not Business Days, on the next
succeeding Business Day) prior to the date which is one month prior to the
Maturity Date request Lender to make Project Loan Advances by delivering to
Lender, not later than 10:00 a.m. Eastern Standard time (i) ten (10) Business
Days prior to the proposed Borrowing Date with respect to (A) the initial
advance of a Project Loan or (B) any other advance of a Project Loan where
Lessee has not waived certain conditions precedent to such Project Loan
Advance pursuant to Section 11.2 to the Participation Agreement or (ii) two
(2) Business Days prior to the proposed Borrowing Date with respect to any
Project Loan Advance (other than an Acquisition Advance) where Lessee has
waived the conditions precedent to such Project Loan Advance pursuant to
Section 11.2 to the Participation Agreement, a duly completed request
therefor in form acceptable to Lender or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a
"Requisition"), it being understood that Lender may rely on the authority of
any individual making such a telephonic request without the necessity of
receipt of such written confirmation. Each Requisition shall be irrevocable
and shall specify (i) the proposed Borrowing Date and (ii) the aggregate
amount of the proposed Project Loan Advance which shall not be less than
$50,000, except for the last Requisition, which may be in an amount equal to
the balance of the Project Loan.
(b) Borrower acknowledges and agrees that Lessee shall make
all requests and make all other decisions under this Agreement on behalf but
with the consent of Borrower. Borrower further acknowledges and agrees that
the Agent shall have the authority to make all decisions, take all actions
and receive all payments, on behalf of Lender under this Agreement.
2.6 Project Loan Advances. Lender shall remit the principal amount
of the Project Loan Advance to be made to Borrower in U.S. Dollars and
immediately available funds at the Principal Office prior to 12:00 (noon)
Eastern Standard time on the Borrowing Date.
2.7 Notes. The Project Loan is evidenced by a promissory note of
Borrower dated as of the date of this Agreement (the "Project Loan Note"), in
a principal amount equal to the Project Loan Commitment. Lender is hereby
authorized to record the date and amount of each Project Loan Advance made by
Lender, each continuation thereof, the date and amount of each payment or
prepayment of principal thereof on the schedule annexed to and constituting a
part of the Project Loan Note, and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded,
provided, that the failure to make any such recordation or any error in such
recordation shall not affect Borrower's obligations hereunder or under the
Project Loan Note.
2.8 Interest Rate on Project Loan Advances. Borrower shall pay
interest in respect of the outstanding unpaid principal amount of the Project
Loan at the Credit Agreement Interest Rate.
2.9 Maximum Interest Rate. If at any time the designated rate
applicable to the Project Loan made by Lender exceeds the highest lawful
rate, the rate of interest on the Project Loan shall be limited to Lender's
highest lawful rate.
2.10 Use of Proceeds. The proceeds of the Project Loan shall be used
by Borrower only for payment of costs specified in the Construction Budget
and for the acquisition of the Property.
2.11 Advances to Pay Interest. During the Construction Period, on
each date which is one Business Day prior to any Interest Payment Date
Borrower shall be deemed to have requested a borrowing pursuant to Section
2.5 in an amount equal to the aggregate amount of Allocated Interest due and
payable on such date with respect to the Property. Three Business Days prior
to such Interest Payment Date, Lessee, as agent for Borrower, shall deliver
to Lender a notice indicating the amount of such Allocated Interest. The
Borrowing Date with respect to any such borrowing shall be the applicable
Interest Payment Date (provided, that the making of an advance of the Project
Loan pursuant to such borrowing shall be subject to satisfaction of the
applicable conditions precedent set forth in Section 7 and Section 8, as
applicable) and the proceeds of such borrowing shall be deemed to be applied
to pay such Allocated Interest. Lender shall record the information relating
to such borrowing to pay Allocated Interest on the schedule annexed to and
constituting part of its Project Loan Note.
SECTION 3. PAYMENTS
3.1 Payments. All payments and prepayments to be made in respect of
principal, interest, fees or other amounts due from Borrower hereunder shall
be payable prior to 2:00 p.m. (Eastern Standard time) on the Interest Payment
Date without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Borrower, and without setoff, counterclaim or
other deduction of any nature, and an action therefor shall immediately
accrue. Such payments shall be made to Lender at the Principal Office in U.S.
Dollars and in immediately available funds. Lender's statement of account,
ledger or other relevant record shall, in the absence of manifest error, be
conclusive as the statement of the amount of principal of and interest on the
Project Loan and other amounts owing under this Agreement and shall be deemed
an "account stated." All Project Loan Advances outstanding on the Maturity
Date shall be due and payable in full on the Maturity Date.
3.2 Interest Payment Dates. Interest on any portion of the Project
Loan shall be due and payable in arrears on the last Business Day of each
March, June, September and December after the date hereof and on the Maturity
Date or upon acceleration of the indebtedness evidenced by the Project Loan
Note. Interest on prepayments of principal under Section 3.3 shall be paid on
the date such prepayment is due. Interest on the principal amount of the
Project Loan shall be due and payable on demand after such principal amount
becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
3.3 Prepayments.
(a) Optional Prepayments. Borrower shall have the right at
its option from time to time, with the written consent of Lessee, to prepay
the Project Loan in whole or part without premium or penalty on the date
specified in a notice by Borrower pursuant to this subsection; provided,
however, that if Lessee is not in Default of its Obligations under the
Operative Agreements beyond any applicable cure period, Borrower shall not
prepay the Project Loan without the prior written consent of Lessee. Whenever
Borrower desires to prepay any part of the Project Loan, Borrower shall, with
the written consent of Lessee, provide a prepayment notice to Lender at least
one (1) Business Day prior to the date of prepayment of Project Loan setting
forth the following information: (i) the date, which shall be a Business Day,
on which the proposed prepayment is to be made; and (ii) the total principal
amount of such prepayment, which shall not be less than Twenty-Five Thousand
Dollars ($25,000). All prepayment notices shall be irrevocable. The principal
amount of the Project Loan for which a prepayment notice is given, together
with interest on such principal amount, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made.
(b) Mandatory Prepayments.
(i) If on any date Borrower shall receive any
payment which is the proceeds of any
title insurance policy (excluding any
payments in respect thereof which are
payable to Lessee in accordance with the
Lease), Borrower shall prepay the Project
Loan on such date in accordance with
Section 9.1(b).
(ii) Intentionally Deleted.
(iii) The Borrower shall prepay the Project
Loan in full on any date that the
Borrower shall receive any amount which
represents proceeds of a payment by
Lessee in respect of (A) the Termination
Value in connection with the delivery of
a Termination Notice; (B) the
Satisfactions Payment required by Section
21(e) of the Lease; (C) a sale of the
Property pursuant to Article XXI or
Article XXII of the Lease; (D) a sale of
the Property pursuant to the terms of the
Three Party Agreement; or (E) Lessor
Financing or Take-Out Financing provided
to the Lessor pursuant to the provisions
of the Three Party Agreement.
(iv) On any date on which the Lessor shall
receive any payment in respect of Excess
Proceeds, Borrower shall prepay the
Project Loan (to the extent not already
paid in full) in accordance with Section
9.1(b)(viii).
(v) Amounts prepaid on account of the Project
Loan may not be reborrowed.
3.4 Indemnity. Borrower covenants to indemnify Lender and hold
Lender harmless from and against all costs, losses and expenses incurred by
Lender under the Credit Agreement occasioned by a default by Borrower under
this Agreement, including, without limitation, breakage costs caused by a
failure by Borrower to make payments hereunder when due.
SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement, and in order
to induce Lender to make the Project Loan to Borrower, Borrower represents
and warrants to Lender as follows:
4.1 Existence; Compliance with Law. Borrower (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its organization, (b) has the power and authority, and the legal right, to
own and operate its property and to conduct the business in which it is
currently engaged, (c) is a limited liability company duly qualified as a
foreign limited liability company and in good standing under the law of the
jurisdiction in which the Property is located and (d) is in compliance with
all material Legal Requirements;
4.2 Power; Authorization; Enforceable Obligations. Borrower has the
power and authority, and the legal right, to make, deliver and perform the
Project Loan Documents to which it is a party and to borrow hereunder and has
taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the Project Loan Note and to authorize the
execution, delivery and performance of the Project Loan Documents to which it
is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Project Loan
Documents to which Borrower is a party. This Agreement has been, and each
other Project Loan Document to which it is a party will be, duly executed and
delivered on behalf of Borrower. This Agreement constitutes, and each other
Project Loan Document to which it is a party when executed and delivered will
constitute, a legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing;
4.3 No Litigation. There is no action, suit or proceeding pending,
or to the best of Borrower's knowledge threatened, against or affecting
Borrower or the Property or that might have a materially adverse affect on
Borrower or the Property in any court, or before or by any Governmental
Authority, whether federal, state, county or municipal, which has not been
disclosed in writing to Lender;
4.4 Consents, Approvals, Authorizations, Etc. No consent, approval,
order or authorization of or registration, declaration or filing with any
Governmental Authority is required in connection with the valid execution and
delivery of the Project Loan Documents or the Development Documents or the
carrying out or performance of any of the transactions required or
contemplated by the Project Loan Documents or the Development Documents or,
if required, such consent, approval, order or authorization has been obtained
or such registration, declaration or filing has been accomplished, except as
has been previously disclosed to Lender or waived by Lessee with the consent
of Lender;
4.5 No Legal Bar. The execution, delivery and performance of the
Project Loan Documents and the Development Documents, the borrowings under
this Agreement and the use of the proceeds of the Project Loan will not
violate any Legal Requirement or any Contractual Obligation of Borrower and
will not result in, or require, the creation or imposition of any Lien on any
of Borrower's properties or revenues pursuant to any Legal Requirement or
Contractual Obligation, except for the Lien of the Security Documents;
4.6 Compliance with Building Codes, Zoning Laws, Etc. Borrower has
no knowledge of any existing, probable or potential violations of any Legal
Requirement affecting the Land or the construction, use or occupancy of the
Improvements;
4.7 Ownership of Property; Liens. Borrower holds good record and
marketable title in fee simple to, or a valid leasehold interest in, the
Property, and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien, other than a
Permitted Exception;
4.8 No Default. Borrower is not in default under or with respect to
any Contractual Obligation in any respect which could be materially adverse
to the business, operations, property or financial or other condition of
Borrower, or which could materially adversely affect the ability of Borrower
to perform its obligations under the Project Loan Documents or the
Development Documents. No Default or Event of Default has occurred and is
continuing;
4.9 Taxes. Borrower has filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due and
payable on such returns or on any assessments made against Borrower or the
Property and all other taxes, fees or other charges imposed on Borrower or
the Property by any Governmental Authority (other than those taxes, the
amount or validity of which is being contested in good faith by appropriate
proceedings diligently prosecuted and with respect to which prior notice has
been given to Lender and reserves satisfactory to Lender have been provided
or a bond satisfactory to Lender has been posted); and no tax Liens have been
filed and no claims are being asserted with respect to any such taxes, fees
or other charges;
4.10 Availability of Utilities. All utility services and facilities
necessary for the construction of the Improvements without impediment or
delay (including, without limitation, gas, electrical, water and sewage
services and facilities) will be available at the boundaries of the Land upon
the commencement of construction and all utility services necessary for the
operation of the Improvements for their intended purposes will be available
at or within the boundaries of the Land when needed;
4.11 Permits, Etc. All Permits for the construction of the
Improvements required to the date that this representation is being made or
reaffirmed have been obtained and are in full force and effect;
4.12 Financial Statements. Any and all financial statements
delivered to Lender by or on behalf of Borrower are true and correct in all
material respects and fairly present the financial conditions of their
subjects as of their respective dates, no material adverse change has
occurred in the financial conditions reflected since their respective dates
and no additional Indebtedness has been incurred by their subjects since the
respective dates of the latest statements, other than the borrowings
contemplated by this Agreement or other Indebtedness which has been approved
by Lender in writing. No such financial statement or any certificate or
statement furnished to Lender by or on behalf of Borrower in connection with
the transactions contemplated by this Agreement, and no representation or
warranty in this Agreement, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained in such financial statements, certificates or other statements or
this Agreement not misleading;
4.13 Federal Regulations. No part of the proceeds of the Project
Loan will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation G or
Regulation U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect. If requested by Lender, Borrower
will furnish to Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation
G or Regulation U, as the case may be;
4.14 Investment Company Act; Other Regulations. Borrower is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness;
4.15 Environmental Matters.
(a) The Property does not contain any Regulated Substances
in amounts or concentrations which (i) constitute or constituted a violation
of, or (ii) could give rise to liability under, any Environmental Law.
(b) The Property and all operations at the Property are in
compliance with all applicable Environmental Laws, and there is no
contamination at, under or about the Property or violation of any
Environmental Law with respect to the Property.
(c) Borrower has not received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
the Property and Borrower does not have knowledge or reason to believe that
any such notice will be received or is being threatened.
(d) Regulated Substances have not been transported or
disposed of from the Property in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability under,
any Environmental Law, nor have any Regulated Substances been generated,
treated, stored or disposed of at, on or under the Property in violation of,
or in a manner that could reasonably be expected to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Borrower,
threatened, under any Environmental Law to which Borrower is or will be named
as a party with respect to the Property nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Property.
(f) There has been no release or threat of release of
Regulated Substances at or from the Property, or arising from or related to
the operations of Borrower in connection with the Property, in violation of
or in amounts or in a manner that could give rise to liability under any
Environmental Laws;
4.16 Regulation H. The Mortgage does not encumber improved real
property which is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968; and
4.17 No other Assets.
(a) Borrower does not now own and will not in the future
own any asset or property other than the Property and incidental property
necessary for the ownership or operation of the Property.
(b) Borrower has not made and will not in the future make
any loans or advances to any third party (including any affiliate or
constituent party, any Beneficial Owner or any affiliate of any constituent
party of Beneficial Owner), and shall not acquire obligations or securities
of its affiliates.
(c) Borrower is and will remain solvent and Borrower will
pay its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
SECTION 5. AFFIRMATIVE COVENANTS
Borrower agrees, unless otherwise consented to in writing by Lender,
that, so long as the Project Loan Commitment remains in effect or the Project
Loan Note remains outstanding and unpaid, Borrower shall:
5.1 Construction. Cause the Completion and equipping of the
Improvements to occur on or before the Outside Completion Date. The
Improvements shall be constructed and equipped in full compliance with the
Legal Requirements affecting the Property and all requirements of the
appropriate Board of Fire Underwriters or other similar body acting in and
for the locality in which the Property is situated;
5.2 Correction of Work. Upon demand of Lender, and at Borrower's
sole cost and expense, correct any structural defect in the Improvements, any
departure from the Plans and Specifications and any failure to comply with
applicable Legal Requirements;
5.3 No Encroachments. Construct the Improvements entirely on the
Land (other than certain off-site ancillary Improvements) and not encroach
upon or overhang any easement or right-of-way or the land of others (unless
such encroachment or overhang is consented to in writing by the owner of the
affected property). When erected the Improvements shall be wholly within any
building restriction lines, however established. Borrower shall furnish from
time to time evidence satisfactory to Lender of compliance with the foregoing
covenant, including, without limitation, a survey prepared by a registered
surveyor or engineer;
5.4 Certain Notices. Give notice to Lender promptly upon the
occurrence of:
(a) the receipt by Borrower of any notice given to Borrower
that a default by Borrower has occurred under the Lease or any of the
Development Documents;
(b) the giving by Borrower of any notice alleging that a
default has occurred under the Lease or any of the Development Documents;
(c) the receipt by Borrower of any notice given to Borrower
or with respect to the Property or the giving by Borrower of any notice which
alleges that any portion of construction or equipping or furnishing of the
Improvements does not comply with any Legal Requirement;
(d) any condition which results or is reasonably likely to
result in a Force Majeure Delay in completion of the Improvements;
(e) any Default or Event of Default;
(f) any (i) default or event of default under any
Contractual Obligation of Borrower or (ii) litigation, investigation or
proceeding which may exist at any time between Borrower and any Governmental
Authority; and
(g) any litigation or proceeding affecting Borrower in
which the amount involved is $100,000 or more and not covered by insurance or
in which injunctive or similar relief is sought;
Each notice pursuant to this subsection shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
in such notice and stating what action Borrower proposes to take with respect
to such occurrence;
5.5 Indemnification. Indemnify Lender against any claims for
brokerage fees or commissions asserted in connection with the Project Loan
and to pay all expenses incurred by Lender in connection with the defense of
any action or proceeding brought to collect any such brokerage fees or
commissions;
5.6 Construction Schedule. As soon as reasonably available after
commencement of construction, provide Lender, at Borrower's expense, with a
critical path method schedule for completion of the construction and
equipping of the Improvements, which schedule shall be in form and substance
satisfactory to Lender;
5.7 Expenses.
(a) Pay or reimburse Lender for all expenses incurred by
Lender before and after the date of this Agreement with respect to any and
all transactions contemplated by this Agreement including, without
limitation, the preparation of any document reasonably required by Lender and
the enforcement of any of Lender's rights under this Agreement and the other
Project Loan Documents.
(b) If any action or proceeding is commenced by Lender,
including, without limitation, any action to foreclose the lien of the
Mortgage or to collect the Project Loan or enforce the Completion Guarantee
or to which Lender is made a party, or in which it becomes necessary to
defend or uphold the lien of the Mortgage, or in which Lender is served with
any legal process, discovery notice or subpoena relating to Lender's lending
to Borrower or accepting the Completion Guarantee, Borrower will reimburse
Lender for all expenses which have been or may be incurred by Lender arising
from or in connection with such action or proceeding;
5.8 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its existence and take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business and comply with all
Contractual Obligations (including the Project Loan Documents, the Lease and
the Development Documents) and Legal Requirements;
5.9 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Legal Requirements shall be made of all
dealings and transactions in relation to its business and activities; and
permit representatives of Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of
Borrower with officers and employees of Borrower and with its independent
certified public accountants;
5.10 Compliance with Project Loan Documents. Borrower shall at all
times (a) observe and perform all of the covenants, conditions and
obligations required to be performed by it (whether in its capacity as Lessor
or otherwise) under each Project Loan Document and each Development Document
to which it is a party and (b) observe and perform, or cause to be observed
and performed, (i) all of the covenants, conditions and obligations of Lessee
under the Lease, even in the event that the Lease is terminated at stated
expiration, following a Lease Event of Default or otherwise and (ii) all of
the covenants, conditions and obligations of the Developer relating to the
construction of Improvements under the Development Agency Agreement;
provided, that the performance of any such obligation by Lessee during the
term of the Lease or by the Developer during the term of the Development
Agency Agreement, respectively, shall be deemed to satisfy such obligation on
the part of Borrower;
5.11 Further Assurances. At any time and from time to time, upon the
written request of Lender, and at the sole expense of Borrower, Borrower will
promptly and duly execute and deliver such further instruments and documents
and take such further action as Lender may reasonably request for the purpose
of obtaining or preserving the full benefits of this Agreement and the other
Project Loan Documents and of the rights and powers herein or therein
granted; and
5.12 Single Purpose Entity; Separateness.
(a) Borrower will not engage in any business other than the
ownership, management, leasing and operation of the Property and Borrower
will conduct and operate its business as presently conducted and operated.
(b) Borrower will not enter into any contract or agreement
with any affiliate of Borrower, any constituent party of Borrower, the holder
of any partnership or membership interest, any manager or the owner of any
beneficial interest in Borrower (each, a "Beneficial Owner") or any affiliate
of any constituent party or Beneficial Owner, except upon terms and
conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
any such party.
(c) Borrower has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence including, without limitation, the holding of such annual and other
meetings as are required by Borrower's organizational documents, and Borrower
will not, nor will Borrower permit any constituent party or Beneficial Owner
to amend, modify or otherwise change the partnership certificate, partnership
agreement, articles of incorporation and bylaws, trust certificate and
agreement or other organizational documents of Borrower or such constituent
party or Beneficial Owner, if such amendments would violate any provision of
the Project Loan Documents, without the prior written consent of Lender,
which consent shall not be unreasonably withheld, nor will Borrower permit
any constituent party or Beneficial Owner to amend, modify or otherwise
change the partnership certificate, partnership agreement, articles of
incorporation and bylaws, trust certificate and agreement or other
organizational documents of such constituent party or Beneficial Owner, if
such amendment, modification or change (i) would adversely affect the
bankruptcy remote nature of Borrower; or (ii) would adversely affect Lender's
interest in the Project Loan. Borrower shall deliver copies of minutes of
annual meetings of Borrower to Lender within thirty (30) days of its receipt
of written request therefor.
(d) Borrower will maintain books, records, financial
statements and bank accounts separate from those of its affiliates and any
constituent party and Borrower will file its own tax returns where required
by applicable code or regulation. Borrower shall maintain its books, records,
resolutions and agreements as official records.
(e) Borrower will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower, any constituent party of Borrower, any
Beneficial Owner or any Affiliate of any constituent party), and shall
conduct business in its own name and shall maintain and utilize separate
stationery, invoices and checks. Borrower shall correct any known or unknown
misunderstanding regarding its status as a separate entity and shall not
identify itself as a division or part of its Affiliates or any of its
Affiliates as a division or part of Borrower.
(f) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character
and in light of its contemplated business operations.
(g) Neither Borrower nor any constituent party will seek or
effect the liquidation, dissolution, winding up, consolidation or merger, in
whole or in part, of Borrower or the sale of all or substantially all of
Borrower's or any constituent party's assets.
(h) Borrower will not commingle the funds and other assets
of Borrower with those of any affiliate or constituent party, any Beneficial
Owner, or any affiliate of any constituent party or Beneficial Owner, or any
other Person.
(i) Borrower has and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any affiliate or constituent
party, any Beneficial Owner, or any affiliate of any constituent party or
Beneficial Owner, or any other Person.
(j) Borrower does not and will not hold itself out to be
responsible for the debts or obligations of any other Person.
(k) If Borrower is a limited liability company, partnership
or business trust, at least one manager, managing partner, general partner or
trustee (the "SPC Member") of Borrower shall itself be a limited liability
company or corporation the sole asset of which is its interest in Borrower
and which at all times has as one of its members or directors an individual
who qualifies as an Independent Director, the SPE Member will at all times
comply with each of the representations, warranties, and covenants contained
in this Section 5.12 as if such representation, warranty or covenant were
made, mutatis mutandis, directly by such SPC Member, the SPC Member and the
Beneficial Owner shall cause Borrower at all times to comply with each of the
representations, warranties, and covenants contained in this Section 5.12.
(l) Borrower shall not cause or permit the board of
directors of Borrower or the SPC Member, as applicable, to take any action
which, under the terms of any certificate of incorporation, by-laws,
operating agreement or any voting trust agreement with respect to any common
stock, requires the unanimous vote of the board of directors of Borrower or
the general partners or members of Borrower or the SPC Member, as applicable,
unless at the time of such action there shall be at least one member of the
board of directors of Borrower or the SPC Member, as applicable, who is an
Independent Director.
(m) Borrower has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or
contingent (including guaranteeing any obligation), other than (i) the
Project Loan or (ii) unsecured trade debt customarily payable within thirty
(30) days.
Borrower shall deliver a certificate to Lender within thirty (30)
days upon written request from Lender but not more frequently than on an
annual basis except for good cause shown, certifying as to its compliance
with each of the provisions of this Section 5.12.
SECTION 6. NEGATIVE COVENANTS
Borrower agrees that, so long as the Project Loan Commitment remains
in effect or the Project Loan Note remains outstanding and unpaid, Borrower
shall not:
6.1 Changes in Plans and Specifications. Modify or supplement the
Plans and Specifications in any material respect without the prior written
consent, as required, of all Governmental Authorities which previously have
approved the matters to be changed;
6.2 Change Orders. Direct or permit the performance of any work
pursuant to any revision (of whatever nature or form) of the Plans and
Specifications or any change orders or change bulletins or other instruments
or understandings without the consent of Lessee, and if such work would
result in a Construction Budget Deficit, the consent of Lender;
6.3 Changes in Agreements. Surrender, terminate, cancel, rescind or
supplement, alter, revise, modify or amend any of the Development Documents
or permit any such action to be taken;
6.4 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon the Property except for:
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of Borrower or
Lessee in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than sixty (60) days or which are
being contested in good faith by appropriate proceedings;
(c) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount and which do not in any case
detract from the value of the Property or interfere with the ordinary conduct
of the business of Borrower or Lessee;
(d) Liens created pursuant to the Project Loan Documents;
and
(e) Permitted Exceptions;
6.5 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligations;
6.6 Other Activities. Conduct, transact or otherwise engage in, or
commit to transact, conduct or otherwise engage in, any business or
operations other than the entry into, and exercise of rights and performance
of obligations in respect of, the Project Loan Documents, the Lease and the
Development Documents and other activities incidental or related to the
foregoing;
6.7 Ownership of Properties, Indebtedness. Own, lease, manage or
otherwise operate any properties or assets other than in connection with the
activities described in Section 6.6, or incur, create, assume or suffer to
exist any Indebtedness or other consensual liabilities or financial
obligations other than as may be incurred, created or assumed or as may exist
in connection with the Project Loan and other obligations incurred by
Borrower hereunder;
6.8 Disposition of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether now
owned or hereafter acquired, except to the extent expressly contemplated by
the Project Loan Documents;
6.9 Discharge of Liens. Create or permit to exist at any time, and
will, at its own expense, promptly take such action as may be necessary duly
to discharge, or cause to be discharged, all Lessor Liens attributable to it,
provided, that Borrower shall not be required to discharge any Lessor Lien
while the same is being contested in good faith by appropriate proceedings
diligently prosecuted so long as such proceedings shall not involve any
material danger of impairment of any of the Liens contemplated by the
Security Documents or of the sale, forfeiture or loss of, and shall not
materially interfere with the disposition of, any Property or title thereto
or any interest therein or the payment of Rent; and
6.10 Change in Ownership. Amend or modify its organizational
documents or transfer its beneficial ownership to any other Person prior to
Completion except to Lessee or its designee. After Completion, Borrower may,
with Lessee's consent, transfer its beneficial interest to any other Person
subject, however, to such Person's compliance with Section 5.12.
SECTION 7. CONDITIONS PRECEDENT TO FIRST ADVANCE
Lender shall not be obligated to make the first advance of the
Project Loan proceeds until all of the conditions set forth in this Section 7
shall have been satisfied.
7.1 Closing Documents. Lender shall have received all the items set
forth in this subsection, in each case in form and substance satisfactory to
Lender:
(a) Taxes. Evidence that all past and current (if then due
and payable) taxes and assessments applicable to the Property or payable by
Borrower have been paid;
(b) Title Insurance Policy. A mortgagee's policy of title
insurance or satisfactory evidence of the Title Company's unconditional
obligation to issue such a policy, dated as the date of the first advance of
the Project Loan. Such policy shall (i) be in the amount of the Project Loan
(or the maximum amount that the title insurance company is permitted by law
to insure, whichever is lower); (ii) insure Lender that the Mortgage creates
a valid Lien on the Property, free and clear of all defects and encumbrances,
except for the Permitted Exceptions; (iii) provide full coverage against
mechanics' liens and against survey exceptions not specified as Permitted
Exceptions; (iv) contain a pending disbursements clause or endorsement in
form and substance satisfactory to Lender and a commitment of the Title
Company to provide notices of title continuation or endorsement sufficient to
enable Lender to determine that title to the Property is satisfactory prior
to Lender's making any subsequent advance of the Project Loan; and (v)
contain such other endorsements and affirmative coverage as Lender may
reasonably request. Lender shall be furnished with copies of all documents
that appear as exceptions in such policy or commitment;
(c) Payment of Title Insurance Premium. Evidence
satisfactory to Lender that all premiums in respect of such title insurance
policy have been paid or will be paid concurrently with the first advance of
the Project Loan;
(d) Survey. A survey of the Land (current to within thirty
(30) days of the date of the first advance of the Project Loan), certified to
Lender and the Title Company by an independent professional licensed land
surveyor satisfactory to Lender, which survey shall be made in accordance
with the Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Title Association and the American
Congress on Surveying and Mapping in 1992. Without limiting the generality of
the foregoing, there shall be surveyed and shown on such survey the
following: (i) the locations of all buildings and other structures, if any,
on the Land and the established building setback lines; (ii) the lines and
the width of streets abutting the Land; (iii) all access and other easements
appurtenant to or necessary or desirable to the use of the Land; (iv) all
roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the Land, whether recorded,
apparent from a physical inspection of the Land or otherwise known to the
surveyor; (v) any party walls with structures on adjoining property any
encroachments on any adjoining property by the building structures and
improvements on the Land; and (vi) if the Land is described by reference to a
filed map, a legend relating the survey to such map;
(e) Availability of Utilities. Letters from local utility
companies or Governmental Authorities stating, or such other evidence
satisfactory to Lender, showing that gas, electric power, sanitary and storm
sewers, water and all other utilities (i) that are necessary and required
during the Construction Period have been completed and/or will be available
in such a manner as to assure Lender that construction will not be impeded by
a lack of utilities and (ii) that are necessary for operation and occupancy
of the Improvements will be completed in such a manner and at such a time as
will assure the opening and operation of the Improvements on or before the
Outside Completion Date;
(f) Hazard Insurance. Policies or certificates of insurance
required by the Lease, accompanied by evidence of the payment of the premiums
for such policies, with mortgagee loss payable endorsements naming Lender as
loss payee;
(g) Flood Insurance. If requested by Lender, a policy of
flood insurance in an amount equal to the lesser of (i) the maximum limit of
coverage available under the National Flood Insurance Act of 1968, as
amended, and (ii) the amount of the Project Loan;
(h) Builder's Risk Insurance. Such builder's risk insurance
as may be required pursuant to the Development Agreement;
(i) Permits. All Permits issued prior to the date of the
Project Loan Advance;
(j) Soil and Geological Report. If requested by Lender, a
soil and geological report, including a summary of soil test borings issued
by a professional engineer satisfactory to Lender;
(k) Opinion of Counsel for Borrower and Lessee. An opinion
of counsel for Borrower and Lessee in form and substance satisfactory to
Lender;
(l) Development Documents. Certified copies of duly
executed counterparts of the Development Agreement, the Development Agency
Agreement and the Architect's Agreement;
(m) Plans and Specifications. A copy of the Plans and
Specifications, satisfactory in form and substance to Lender and Consulting
Professional;
(n) Cost Breakdown. A cost breakdown and schedule for
construction of the Improvements setting forth all items of costs and
expenses and estimating the construction trade schedules required to complete
the construction and equipping of the Improvements;
(o) Project Loan Documents. Duly executed copies of all
Project Loan Documents and a fully executed original Lease;
(p) Construction Budget. A certified copy of the
Construction Budget;
(q) Organizational Documentation. The Organizational
Certificate of Borrower, which shall include, if Borrower is a limited
partnership or a limited liability company, with respect to such entity:
(1) the partnership agreement or limited
liability company agreement, including
all amendments and attachments, certified
by a general partner or member;
(2) the partnership certificate or
certificate of formation, including all
amendments, certified by an official in
whose office it is filed or recorded;
(3) any certificates filed or recorded or
required to be filed or recorded by such
partnership or limited liability company
in the state of its formation and the
state where the Land is located in order
for it to do business in those states;
(4) any consents by other partners or members
required for the borrowing contemplated
by this Agreement and the execution,
delivery and performance of the Project
Loan Documents; and
(5) if requested by Lender, an acknowledgment
by each of the Partners or Members of his
or its continued membership in Borrower;
(r) Borrowing Certificate. A Borrowing Certificate, duly
executed by Borrower and Lessee.
7.2 Accounting. Lender shall have received and approved an
accounting of all expenditures for costs shown on the Construction Budget
incurred prior to the first advance of the Project Loan.
7.3 Representations and Warranties. The representations and
warranties which are contained in the Project Loan Documents or any
certificate, document or financial or other statement furnished under or in
connection with the Project Loan Documents, shall be correct on and as of the
date of the first advance as if made on and as of such date.
7.4 No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to
the advance to be made on such Borrowing Date.
7.5 Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Lender and its counsel.
7.6 Environmental Audit. Lender shall have received an Environmental
Audit in form and substance acceptable to Lender, provided that such
Environmental Audit shall be delivered to Lender not less than five (5)
Business Days prior to the Property Closing Date.
7.7 Developer Equity. Lender shall be satisfied that the Lessor
shall have contributed on the relevant Borrowing Date an amount equal to the
Developer Equity associated with such Project Loan Advance.
7.8 Acquisition of Property. Borrower will be using all or the
applicable portion of such proceeds to acquire fee title or a valid leasehold
interest in the Land.
SECTION 8. CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES
8.1 All Subsequent Advances. Lender shall not be obligated to make
any Project Loan Advance subsequent to the initial advance until all of the
conditions set forth in this subsection shall have been met to Lender's
satisfaction.
(a) Satisfactory Title. The Security Documents shall
constitute a valid lien on the Property for the full amount of the Project
Loan advanced to and including such date, free and clear of all Liens except
for Permitted Exceptions. Lender shall have been furnished with a notice of
title continuation or an endorsement to the title insurance policy issued to
Lender in connection with the first advance of the Project Loan, which
continuation or endorsement shall state that since the last disbursement of
the Project Loan there have been no changes in the state of title to the
Property.
(b) No Other Security Interests. All materials and fixtures
incorporated in the construction of the Improvements shall have been
purchased so that their absolute ownership shall have vested in Borrower
immediately upon delivery to the Land and Borrower shall have produced and
furnished, if required by Lender, the contracts, bills of sale or other
agreements under which title to such materials and fixtures is claimed.
(c) Statement of Expenditures. If requested by Lender,
Lender shall have received a statement of Borrower and any contractor or
subcontractor, in form and substance satisfactory to Lender, setting forth
the names, addresses and amounts due or to become due as well as the amounts
previously paid to every contractor, subcontractor, and supplier furnishing
materials for or performing labor on the construction of any part of the
Improvements.
(d) Representations and Warranties. The representations and
warranties contained in any of the Project Loan Documents or any certificate,
document or financial or other statement furnished under or in connection
with the Project Loan Documents, shall be correct on and as of the Borrowing
Date for such advance as if made on and as of such date.
(e) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or result from the
advance to be made on such Borrowing Date; provided, however, if a Default or
an Event of Default has occurred under Sections 10.1(b), 10.1(d), 10.1(f) or
10.1(i), so long as no Lease Event of Default has occurred and is continuing,
Lender will continue to make Project Loan Advances to Borrower in accordance
with the terms and conditions of this Agreement; provided, further, however,
Lender shall not be obligated to make Project Loan Advances if such Default
or Event of Default threatens the lien priority of the Mortgage or the right
of Lender to receive payments of Rent under the Assignment of Lease.
(f) Construction Progress. In the case of advances to pay
costs of constructing and equipping of the Improvements, at Lender's option,
Lender shall have received and approved a draw request signed by the
Developer, satisfactory in form and substance to Lender, with appropriate
insertions, accompanied by true copies of unpaid invoices, receipted bills
and lien waivers, and such other supporting information as Lender may
request.
(g) Soft Costs. In the case of advances to pay the costs
included in the Construction Budget that are not among the costs described in
the preceding paragraph, Lender shall have received such evidence as it may
require that such costs have been properly incurred and are due and payable.
(h) Evidence of Compliance. All instruments relating to
each advance and all actions taken on or prior to each advance in connection
with the performance of the Project Loan Documents shall be satisfactory to
Lender, and Lender shall have been furnished with such documents, reports,
certificates, affidavits and other information, in form and substance
satisfactory to Lender, as Lender may require to evidence compliance with all
of the provisions of the other Project Loan Documents.
(i) Lien Waivers. Borrower shall have furnished to Lender
lien waivers in form and substance satisfactory to Lender from such
contractors, subcontractors, suppliers and materialmen as Lender may specify,
evidencing that they have been paid in full for all work performed or
materials supplied to the date of Borrower's request for such advance, except
for retentions provided for in this Agreement.
(j) Agreements. Each of the Development Documents and the
Lease shall be in full force and effect and there shall exist no uncured
default by any party under the Development Documents or the Lease (provided
that performance by Lessee under the Completion Guaranty shall be deemed for
the purposes of this subsection 8.1(j) to have cured any default under the
Development Documents or related default under the Lease).
(k) Damage or Injury. The Improvements shall not have been
materially damaged by fire or other casualty unless there shall have been
received, by Lender or a person approved by Lender, insurance proceeds
sufficient in the sole judgment of Lender and the Consulting Professional, to
effect satisfactory restoration and completion of the Improvements on or
before the Outside Completion Date.
(l) Taxes. If requested by Lender, Lender shall have
received evidence that all past and current (if then due and payable) taxes
and assessments applicable to the Property or payable by Borrower in
connection with the Property have been paid.
(m) Waived Conditions. If requested by Lender, all
conditions waived with respect to the initial advance or any subsequent
advance shall be met.
(n) Borrowing Certificate. Lender shall have received a
Borrowing Certificate dated the date of such advance.
(o) Cost Overruns. Lender shall have received a certificate
of the Developer, acknowledged by Lessee, indicating that the cost to
complete the construction of the Property in accordance with the Plans and
Specifications is expected to be less than or equal to 150% of the amounts
shown on the initial Construction Budget.
(p) Developer Equity. Lender shall be satisfied that the
Lessor shall have contributed on the relevant Borrowing Date an amount equal
to the Developer Equity associated with such Project Loan Advance.
8.2 Completion of Improvements. The Improvements shall not be deemed
completed for purposes of this Agreement until all of the conditions set
forth in this subsection shall have been satisfied.
(a) The Improvements shall have been completed in
accordance with the Plans and Specifications and the Development Agreement
and accepted by Lessee.
(b) Lender shall have received the following, in each case
in form and substance satisfactory to Lender:
(i) evidence of the approval by all
appropriate Governmental Authorities of
the Improvements as being complete as to
construction;
(ii) the certification of the Architect and of
any Consulting Professional that the
Improvements have been completed
substantially in accordance with the
Plans and Specifications, that direct
connection has been made to all
appropriate utility facilities and that
the Improvements are ready for occupancy;
and
(iii) a perimeter survey showing the completed
Improvements, all easements on and
appurtenant to the Property and the
location of access to the Land and all
utility and water easements directly
affecting the Land, with a certification
that the Improvements do not encroach on
any other property that no buildings,
other structures or appurtenances on
other property encroach on the Land and
that all set-back requirements have been
complied with.
SECTION 9. MATTERS RELATING TO PAYMENTS AND COLLATERAL
9.1 The Account.
(a) Lender shall establish an account (the "Account") into
which Lender shall deposit all payments, receipts and other consideration of
any kind whatsoever received by Lender pursuant to the Assignment of Lease or
otherwise.
(b) Except as otherwise provided in Section 9.2, payments
deposited from time to time in the Account shall be paid out as follows:
(i) An amount equal to any payment identified
by Lessee as Project Loan Basic Rent
shall be paid out of the Account by
Lender on the date received, and shall be
applied to the payment of the interest
then due and payable on the Project Loan
until such amounts are paid in full.
(ii) An amount equal to any payment identified
by Lessee as a payment which is the
proceeds of any title insurance policy
(excluding any payments in respect
thereof which are payable to Lessee in
accordance with the Lease) shall be paid
out of the Account by Lender promptly
after receipt, and shall be applied on
the date deposited in the Account, first,
to the payment of principal and interest
on the Project Loan until such amounts
are paid in full, second, to the payment
to Borrower of an amount equal to the
Developer Yield and the Developer Equity
until such amounts are paid in full and,
third, the remainder, if any, shall be
paid to such Person or Persons as
Borrower may designate.
(iii) An amount equal to any such payment
identified by Lessee as a payment in
respect of the Termination Value pursuant
to Section 17.1 of the Lease shall be
paid out of the Account by Lender
promptly after receipt, and shall be
applied on the date deposited in the
Account, first, to the payment of
principal and interest on the Project
Loan until such amounts are paid in full,
second, to the payment to Borrower of an
amount equal to the Developer Yield and
the Developer Equity until such amounts
are paid in full and, third, the
remainder, if any, shall be paid to
such Person or Persons as Borrower may
designate.
(iv) An amount equal to any such payment
identified by Lessee as proceeds of the
sale of any Property pursuant to Article
XXI of the Lease ("Net Sale Proceeds")
shall be paid out of the Account by
Lender promptly after receipt, and shall
be applied on the date deposited in the
Account, first, to the payment of the
principal of the Project Loan then
outstanding, second, to the payment to
Borrower of an amount not to exceed the
outstanding the Developer Equity, and,
third, the remainder of such amount
("Excess Sale Proceeds") shall be
deposited with Lender in escrow to secure
the obligations of Lessee and other
Lessees under other leases of real
property.
(v) An amount equal to any payment identified
by Lessee as the Maximum Residual
Guarantee Amount (as defined in the
Lease) shall be paid out of the Account
by Lender promptly after receipt, and
shall be applied on the date deposited in
the Account to the payment only of
principal of the Project Loan then
outstanding.
(vi) Intentionally Deleted.
(vii) An amount equal to any such payment
identified by Lessee as Supplemental Rent
(as defined in the Lease) (but, so long
as an Event of Default has not occurred
and is continuing, excluding all Excepted
Payments) shall be paid out of the
Account by Lender promptly after receipt,
and shall be applied on the date
deposited in the Account to the payment
of any amounts then owing to Lender.
(viii) An amount equal to any such payment
identified by the Lessor as Excess
Proceeds shall be paid out of the Account
by Lender promptly after receipt, and
shall be applied on the date deposited in
the Account to the payment of any amounts
then owing to Lender.
If Lender receives any payment in lieu of Basic Rent in any case or
proceeding arising under the United States Bankruptcy Code, then such payment
shall be deemed to be a payment on account of Basic Rent for the purpose of
this Section 9.1. In the event that Lessee shall fail to identify the nature
of any payment deposited by it in the Account, or Lender in its reasonable
judgment shall determine that the identification made by Lessee is incorrect
or inappropriate, the nature of such payment shall instead be identified by
Lender in its reasonable judgment and applied in the manner specified above;
provided, that in the event that Lender identifies such payment as an
Excepted Payment, such payment shall be paid out of the Account by Lender to
such Person or Persons as Borrower may designate.
(c) Upon payment in full of the Project Loan and all other
amounts owing by Borrower hereunder or under any other Project Loan Document
and termination of the Project Loan Commitment by Borrower, any moneys
remaining in the Account shall be paid to Borrower or such other Person or
Persons as Borrower may designate.
9.2 Proceeds of Collateral; Proceeds Remaining in Account.
(a) All moneys collected by Lender upon any sale or other
disposition of the Property (including all moneys realized from the exercise
of the Purchase Option and upon the exercise of remedies under the Mortgage),
together with all other moneys received by Lender in connection therewith
(except as otherwise specified in Section 9.1) and (b) all moneys contained
in the Account on the date of an acceleration or on the Maturity Date (if the
Project Loan has not then been repaid in full), or deposited in the Account
thereafter (except as otherwise specified in Section 9.1(c)), shall be
applied as follows:
First, to the payment of (x) any and all sums advanced by
Lender in order to preserve the Collateral or preserve its
security interest therein and (y) the expenses of retaking,
holding, preparing for sale or lease, selling or otherwise
disposing or realizing on the Collateral, or of any
exercise by Lender of its rights under the Project Loan
Documents, together with attorneys' fees and court costs;
Second, to the payment of the amounts then due and unpaid
for principal of, interest on, and any other amounts then
due and unpaid in respect of the Project Loan;
Third, to the payment to Borrower of the amounts then due
on account of the Developer Yield and an amount sufficient
to return the Developer Equity; and
Fourth, to the extent moneys remain after application
pursuant to clauses First through Third above, to Borrower
or to whomever may be lawfully entitled to receive such
surplus.
9.3 Certain Remedial Matters. Notwithstanding any other provision of
this Agreement or any other Project Loan Document:
(i) except during the continuance of an Event
of Default, Borrower shall, at all times
to the exclusion of Lender, receive all
rights to Excepted Payments due to
Borrower and to demand, collect or
commence an action at law to obtain such
payments and to enforce any judgment with
respect thereto whether against Lessee,
Lender or any other Person; and
(ii) except during the continuance of an Event
of Default, Borrower shall at all times
retain the right, but not to the
exclusion of Lender, (A) to receive from
Lessee all notices, certificates and
other documents and all information that
Lessee is permitted or required to give
or furnish to the "Borrower" or the
"Lessor" pursuant to the Lease, the
Participation Agreement or any other
Operative Agreement, (B) to inspect the
Property, (C) to retain all rights with
respect to insurance that Article XIV of
the Lease specifically confers upon the
"Lessor," (D) to provide such insurance
as Lessee shall have failed to maintain
or as Borrower may desire, (E) to enforce
compliance by Lessee with the provisions
of Articles VIII, X, XI, XII, XIV and
XXXIII of the Lease, and (F) subject to
the other applicable provisions of this
Agreement, to perform for Lessee under
Article XVIII of the Lease.
9.4 Release of the Property, Etc.
(a) If Lessee shall at any time purchase the Property
pursuant to Section 17.2 of the Lease or exercise its Purchase Option with
respect to the Property under Article XXI of the Lease, then upon
satisfaction by Borrower of its obligation to prepay the Project Loans
pursuant to Section 3.3(b) and to pay accrued interest on the Project Loans
so prepaid pursuant to Section 3.2, the Property shall be released from the
Liens created by the Security Documents, all without delivery of any
instrument or performance of any act by any party. In addition, upon payment
in full of the Project Loan and all other amounts owing by Borrower hereunder
or under any other Project Loan Document and termination of the Project Loan
Commitment by Borrower, the Property shall be released from the Liens created
by the Security Documents, all without delivery of any instrument or
performance of any act by any party. Upon request of Borrower following any
such release, Lender shall, at the sole cost and expense of Borrower, execute
and deliver to Borrower or Lessee such documents as Borrower shall reasonably
request to evidence such release.
(b) Notwithstanding anything to the contrary herein, upon
termination of the Project Loan Commitment and upon the payment in full of
(i) the Project Loan and all other amounts owing by Borrower hereunder or
under any other Project Loan Document and (ii) all amounts owing by Lessee to
the Developer or to any other Person under the Operative Agreements, all
remaining moneys in the Account (other than any Excess Sales Proceeds which
shall be held in escrow to secure the obligations of Lessees under other
Leases of Real Property) shall be paid out to Lessee.
SECTION 10. EVENTS OF DEFAULT
10.1 Events of Default. The occurrence of any of the events set
forth in this subsection shall constitute an "Event of Default":
(a) Borrower shall fail to pay any principal of the Project
Loan when due in accordance with the terms thereof or hereof; or Borrower
shall fail to pay any interest on the Project Loan, or any other amount
payable hereunder, within five (5) days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by
Borrower herein or in any other Project Loan Document or which is contained
in any certificate, document or financial or other statement furnished by it
at any time under or in connection with this Agreement or any other Project
Loan Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) Construction of the Improvements shall not be Completed
on or before the Outside Completion Date; or
(d) Borrower shall default in the observance or performance
of any agreement contained in this Agreement or any other Project Loan
Document and such failure shall continue unremedied for a period of thirty
(30) days after written notice thereof has been given to Borrower by Lender;
or
(e) (i) Borrower shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Borrower shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower any case,
proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period
of sixty (60) days; or (iii) there shall be commenced against Borrower any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within sixty (60) days from the entry thereof; or (iv) Borrower shall
take any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) Borrower shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered
against Borrower involving in the aggregate a liability (not paid or fully
covered by insurance) of $100,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or
(g) (i) Any of the Project Loan Documents shall cease, for
any reason, to be in full force and effect, or Borrower shall so assert, or
(ii) the Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby; or
(h) The Completion Guarantee shall cease, for any reason,
to be in full force and effect or Lessee shall so assert; or
(i) Except as otherwise expressly provided in Section 6.10,
the entire outstanding equity interest in Borrower shall cease to be owned by
those individuals and entities set forth on Schedule A to the Organizational
Certificate of Borrower; or
(j) The Lease shall cease, for any reason, to be in full
force and effect or Lessee shall so assert; or
(k) A Lease Event of Default shall have occurred and be
continuing; or
(l) A Credit Agreement Event of Default shall have occurred
and be continuing.
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of Section 10.1(e), automatically the Project
Loan Commitment shall immediately terminate and the Project Loan (with
accrued interest thereon) and all other amounts owing under this Agreement
and the other Project Loan Documents shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) Lender may by notice to Borrower
declare the Project Loan Commitment to be terminated forthwith, whereupon the
Project Loan Commitment shall immediately terminate; and (ii) Lender may by
notice to Borrower, declare the Project Loan (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Project Loan
Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind
are hereby expressly waived.
10.2 Lender's Right to Apply Project Loan Proceeds. During the
continuance of an Event of Default, Lender shall have the right, but not the
obligation, to disburse and directly apply Project Loan proceeds to satisfy
Borrower's obligations. Borrower hereby authorizes Lender during the
continuance of any Event of Default to hold, use, disburse and apply advances
of the Project Loan for costs incurred in developing, constructing and
equipping the Improvements, payment or performance of obligations of Borrower
under the Project Loan Documents (including payment of interest on the
Project Loan) and preservation and protection of the Collateral. Such
disbursements shall be deemed advances of the Project Loan for all purposes
and shall be secured by the Security Documents.
10.3 Lender's Right to Complete. Upon the occurrence of any Lease Event of
Default or a default by Lessee under the Completion Guarantee, in addition to
any other remedies which Lender may have pursuant to the Project Loan
Documents, or as provided by statute or rule of law, Lender may enter upon
the Land and construct, equip and complete the Improvements in accordance
with the Plans and Specifications with such changes in the Plans and
Specifications as Lender may from time to time deem appropriate, all at the
risk, cost and expense of Borrower. Lender shall have the right at any and
all times to discontinue any work commenced by it in respect of the
Improvements or to change any course of action undertaken by it and shall not
be bound by any limitations or requirements of time whether set forth in this
Agreement or otherwise. Lender shall have the right and power, but shall not
be obligated, to assume Borrower's interest under any contract made by or on
behalf of Borrower in any way relating to the Improvements or the
construction of the Improvements and to take over and use all or any part or
parts of the labor, materials, supplies and equipment contracted for by or on
behalf of Borrower, whether or not previously incorporated into the
Improvements, all in the sole and absolute discretion of Lender. In
connection with any construction of the Improvements undertaken by Lender
pursuant to the provisions of this subsection, Lender may (i) engage
builders, contractors, architects, engineers and others for the purpose of
furnishing labor, materials and equipment in connection with any construction
of the Improvements, (ii) pay, settle or compromise all bills or claims which
may become Liens against the Property, or any part of the Property, or which
have been or may be incurred in any manner in connection with the
construction, completion and equipping of the Improvements or for the
discharge of Liens or defects in the title of the Property, or any part of
the Property, and (iii) take such other action (including the employment of
watchmen to protect the Property) or refrain from acting under this
Agreement, as Lender may in its sole and absolute discretion from time to
time determine without any limitation whatsoever. Borrower shall be liable to
reimburse Lender for all sums paid or incurred for the construction,
completion and equipping of the Improvements, whether such sums shall be paid
or incurred pursuant to the provisions of this subsection or otherwise. At
Lender's option, all such sums shall be treated as advances of the Project
Loan for all purposes or as demand obligations of Borrower, bearing interest
at the non-default interest rate provided in the Project Loan Note plus 4%
from the date of payment by Lender to the date of repayment by Borrower. All
of the foregoing amounts, including interest, shall be deemed to constitute
advances under this Agreement, be evidenced by the Project Loan Note and
secured by the Security Documents. Upon the occurrence of any Lease Event of
Default or a default by Lessee under the Completion Guaranty, the rights,
powers and privileges provided in this subsection and all other remedies
available to Lender under this Agreement or by statute or by rule of law may
be exercised by Lender at any time and from time to time whether or not the
Project Loan shall be due and payable, and whether or not Lender shall have
instituted any foreclosure or other action for the enforcement of the
Security Documents or the Project Loan Note.
10.4 Power of Attorney. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted in
Section 10.3 above, Borrower hereby irrevocably constitutes and appoints
Lender its true and lawful attorney-in-fact to execute, acknowledge and
deliver any instruments and do and perform any acts such as are referred to
in this subsection in the name and on behalf of Borrower. This power of
attorney is a power coupled with an interest and cannot be revoked.
SECTION 11. MISCELLANEOUS
11.1 No Waivers. The making of a Project Loan Advance shall not
constitute a waiver of any of the conditions of Lender's obligation to make
further advances. No waiver of any such condition shall constitute a waiver
of any Default or Event of Default related to or predicated upon such
condition. Any advance made by Lender and any sums expended by Lender
pursuant to the Project Loan Documents shall be deemed to have been made
pursuant to this Agreement, notwithstanding the existence of an uncured
Default or Event of Default. No advance of the Project Loan at a time when an
Event of Default exists, whether or not Lender had actual knowledge of such
default, shall constitute a waiver of any right or remedy of Lender existing
by reason of such Event of Default, including, without limitation, the right
to accelerate the maturity of the Project Loan or to foreclose the Lien of
the Security Documents or to refuse to make further Project Loan Advances.
11.2 Lender and Lessee as Sole Beneficiaries. All conditions of the
obligation of Lender to make Project Loan Advances are imposed solely and
exclusively for the benefit of Lender and Lessee and their respective assigns
and no other Person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that
Lender will refuse to make advances in the absence of strict compliance with
any or all such terms and no Person shall, under any circumstances, be deemed
to be a beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by Lender at any time if in its sole discretion
Lender deems such waiver to be advisable. Lender's obligation to make
advances of the Project Loan, subject to the terms and conditions of this
Agreement, is solely for the benefit of Borrower and Lessee and no other
Person shall be deemed to be a beneficiary of such obligation nor entitled to
require any advance of Project Loan proceeds. Inspections and approvals of
the Plans and Specifications and the Improvements and the workmanship and
materials used in the construction of the Improvements shall impose no
responsibility or liability of any nature whatsoever on Lender, and no Person
shall, under any circumstances, be entitled to rely upon such inspections and
approvals by Lender for any reason.
Lender's sole obligation under this Agreement is to make the advances if and
to the extent required by this Agreement.
11.3 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case of delivery
by hand, when delivered, (b) in the case of delivery by mail, three (3) days
after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows, or to such other address as may be hereafter notified
by the respective parties hereto:
Borrower: Agree-Milestone Center Project, L.L.C.
31850 Northwestern Highway
Farmington Hills, MI 48334
Attention: Richard Agree
Facsimile: (248) 737-9110
with a copy to: Sommers, Schwartz, Silver & Schwartz, P.C.
2000 Town Center, Suite 900
Southfield, Michigan 48075
Attention: Leon Schurgin, Esq.
Facsimile: (248) 746-4001
Lender: Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Department
Facsimile: (302) 651-1576
Lessee: Borders, Inc.
100 Phoenix Drive
Ann Arbor, MI 48108
Attention: Real Estate Department
Facsimile: (734) 477-1370
with a copy to: Conlin, McKenney & Philbrick, P.C.
350 South Main Street
Ann Arbor, Michigan 48104
Attention: Phillip J. Bowen, Esq.
Facsimile: (734) 761-1637
provided that any notice, request or demand to or upon Lender shall not be
effective until received.
11.4 Modifications. Any provision of this Agreement may be changed,
waived or terminated only by an instrument in writing signed by the party
against whom enforcement of the change, waiver or termination is sought.
11.5 Rights Cumulative. All rights, powers and remedies given to
Lender under this Agreement are cumulative and not alternative, and are in
addition to all rights, powers and remedies otherwise afforded Lender (all
rights, powers and remedies of Lender collectively, "Lender's Rights"); any
forbearance or delay by Lender in exercising any of Lender's Rights shall not
be deemed to be a waiver, and the exercise or partial exercise of any of
Lender's Rights shall not preclude the further exercise of any of Lender's
Rights which shall continue in full force and effect until specifically
waived by an instrument in writing executed by Lender. All representations,
warranties and covenants contained in any of the Project Loan Documents shall
survive the making of the advances of the Project Loan.
11.6 Schedules. The Schedules attached to this Agreement are
essential to and are made a part of this Agreement.
11.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
11.8 Waiver of Jury Trial, Submission to Jurisdiction. Borrower
IRREVOCABLY WAIVES TRIAL BY JURY AND ANY OBJECTIONS, INCLUDING WITHOUT
LIMITATION ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR IN THE FUTURE HAVE TO THE BRINGING
OF ANY SUCH ACTION OR PROCEEDING IN ANY JURISDICTION. All judicial actions,
suits or proceedings brought against Borrower and its property with respect
to its obligations, liabilities or any other matter under or arising out of
or in connection with this Agreement or any other Project Loan Document or
for recognition or enforcement of any judgment rendered in any such
proceedings may be brought in any trial or appellate state or federal court
of competent jurisdiction in The City of New York. By execution and delivery
of this Agreement, Borrower accepts, generally and unconditionally, the
non-exclusive jurisdiction of such courts and irrevocably waives, and agrees
not to plead or claim, any objection that it may ever have to the venue of
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court. Borrower irrevocably agrees
that all process in any proceeding or any court arising out of or in
connection with this Agreement or any of the other Project Loan Documents,
may be effected by mailing to Borrower a copy by registered or certified mail
or any substantially similar form of mail, postage prepaid, to Borrower at
its address set forth in subsection 11.3 or at such other address of which
Lender shall have been notified in accordance with the terms of such
subsection. Such service shall be effective five (5) days after such mailing.
Such service will be effective and binding service in every respect. Borrower
shall not assert that such service did not constitute effective and binding
service within the meaning of any applicable state or federal law, rule,
regulation or the like. Nothing in this Agreement shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
11.9 Captions. The captions in this Agreement are for convenience of
reference only, and in no way limit or amplify the provisions of this
Agreement.
11.10 Obligations Non-Recourse. Anything to the contrary contained
in this Agreement, the Project Loan Note or in any other Project Loan
Document notwithstanding, neither Borrower, nor any member, partner (general
or limited), officer, director or shareholder of Borrower, nor any member,
partner (general or limited), officer, director or shareholder thereof, nor
any of their respective successors or assigns (all such Persons being
hereinafter referred to collectively as the "Exculpated Persons"), shall be
personally liable in any respect for any representation, warranty, liability
or obligation hereunder or in any other Project Loan Document including the
payment of the principal of, or interest on, the Project Loan Note, or for
monetary damages for the breach of performance of any of the covenants
contained in this Agreement, the Project Loan Note, the Mortgage or any other
Project Loan Document. Lender agrees that, in the event it pursues any
remedies available to it under this Agreement, the Project Loan Note, the
Assignment of Lease, the Mortgage or under any other Project Loan Document,
Lender shall have no recourse against Borrower nor any Exculpated Person, for
any deficiency, loss or claim for monetary damages or otherwise resulting
therefrom and recourse shall be had solely and exclusively only against the
Property; but nothing contained herein shall be taken to prevent recourse
against or the enforcement of remedies against the Property in respect of any
and all liabilities, obligations and undertakings contained in the Mortgage,
this Agreement, the Project Loan Note, the Assignment of Lease or in any
other Project Loan Document. Notwithstanding the provisions of this
paragraph, nothing in the Mortgage, the Assignment of Lease, this Agreement,
the Project Loan Note or any other Project Loan Document shall: (a)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Project Loan Note or arising under the Mortgage or this
Agreement or secured by the Mortgage, but the same shall continue until paid
or discharged; (b) relieve Borrower from liability and responsibility for
(but only to the extent of the damages arising by reason of): (i) active
waste knowingly committed by Borrower with respect to the Property or (ii)
any fraud on the part of Borrower or any such Exculpated Person; (c) relieve
Borrower from liability and responsibility for (but only to the extent of the
moneys misappropriated, misapplied or not turned over): (i) except for
Excepted Payments, misappropriation or misapplication by Borrower (i.e.,
application in a manner contrary to any of the Project Loan Documents) of any
insurance proceeds or condemnation award paid or delivered to Borrower by any
Person other than Lender; or (ii) except for Excepted Payments, any rents or
other income received by Borrower from Lessee that are not turned over to
Lender in accordance with the Assignment of Lease; or (d) affect or in any
way limit Lender's rights and remedies hereunder with respect to the rights
and powers assigned under the Assignment of Lease or to obtain a judgment
against Borrower (provided that no deficiency judgment or other money
judgment shall be enforced against Borrower or any Exculpated Person except
to the extent of Borrower's interest in the Property or to the extent
Borrower may be liable as otherwise contemplated in clauses (b) and (c) of
this Section).
IN WITNESS WHEREOF, this Agreement has been duly executed by Lender
and Borrower as of the date first written above.
WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee
By:/s/ Joseph Feil
------------------------
Name: Joseph Feil
Title: Financial Services Officer
AGREE-MILESTONE CENTER, L.L.C.
a Delaware limited liability company
BY: Agree Limited Partnership
a Delaware limited partnership
ITS: Member
By: Agree Realty Corporation
a Maryland corporation
By: /s/ Richard Agree
-----------------
Name: Richard Agree
Title: President
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
All that certain land situated in Montgomery County, Maryland, and more
particularly described as follows:
Lot numbered Twenty-nine (29)in Block lettered "C" as shown on a plat of
subdivision entitled "Plat of Resubdivision, Lots 27-29 and Outlots A & B,
Block C. MILESTONE CENTER", and recorded among the land records of Montgomery
County, Maryland, in Plat Book 185, at Plat No. 20444.
Address: 20926 Frederick Road
Germantown, MD
Parcel ID No: Lot 29, Block C Milestone Center
County Tax Account No: 03198693
<PAGE>
A-1
EXHIBIT B
SITE PLAN
(Graphic Omitted)
B-1
EXHIBIT C
CONSTRUCTION BUDGET
(Attached)
C-1
Collateral is or includes Fixtures
TRUST MORTGAGE
FROM
AGREE FACILITY NO. I, L.L.C.
As grantor
TO
MANUFACTURERS AND TRADERS TRUST COMPANY
as trustee
Dated as of June 28, 1999
Prepared by and Mail to:
Rodney J. Dillman, Esq.
Day, Berry & Howard LLP
CityPlace I
Hartford, CT 06103-3499
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT.......................................................1
GRANTING CLAUSES............................................................1
Granting Clause First.......................................................2
Granting Clause Second......................................................2
Granting Clause Third.......................................................3
ARTICLE 1 - Definitions.....................................................3
"Assignment".......................................................4
"Base Rent"........................................................4
"Business Day".....................................................4
"Chesterfield Lease"...............................................4
"Collection Account" ..............................................4
"Condemnation Gap Policy"..........................................4
"Corporate Trust Office"...........................................4
"default"..........................................................4
"Determination Date"...............................................4
"Environmental Report".............................................4
"Environmental Laws" ..............................................4
"Environmental Policy".............................................5
"Event of Default".................................................5
"ERISA" ..........................................................5
"Grand Blanc Lease"................................................5
"Grant" ..........................................................5
"Hazardous Substance"..............................................5
"Improvements".....................................................5
"Indenture"........................................................5
"Installment Payment(s)"...........................................5
"Installment Payment Dates"........................................6
"Institutional Investor"...........................................6
"Land Parcel" and Land Parcels"....................................6
"Leases" ..........................................................6
"Lessee" ..........................................................6
"Lien of this Indenture"...........................................6
"Majority Registered Owners".......................................6
"Make-Whole Premium"...............................................6
"Note Agreement"...................................................7
"Note Purchaser"...................................................7
"Notes" ..........................................................7
"outstanding"......................................................7
"Outstanding Principal Amount".....................................7
"Overdue Rate".....................................................7
"Owner" ..........................................................7
"Parking Reserve Amount"...........................................8
"Performance Bond".................................................8
"Permitted Encumbrances"...........................................8
"Permitted Investments"............................................8
"Person" ..........................................................9
"Pontiac Lease"....................................................9
"Property".........................................................9
"Radius Agreement".................................................9
"Register".........................................................9
"Registered Owner".................................................9
"Reinvestment Yield"...............................................9
"Reserve Account".................................................10
"Structural Reserve Amount".......................................10
"Subordination Agreement".........................................10
"Trust Estate"....................................................10
"Trustee".........................................................10
"Waterford Lease".................................................10
ARTICLE 2 - The Notes......................................................10
2.1 The Notes................................................10
2.2 Execution of Notes.......................................11
2.3 Home Office Payment......................................12
2.4 Register.................................................12
2.5 Registered Owners........................................13
2.6 Certificate of Authentication............................13
2.7 Transfer and Exchange of Notes...........................13
2.8 New Notes................................................14
2.9 Trustee as Agent.........................................15
ARTICLE 3 - Particular Covenants...........................................15
3.1 Title to the Property....................................15
3.2 Further Assurances.......................................15
3.3 Recording................................................15
3.4 Payment of the Notes.....................................16
3.5 The Leases; the Assignment; Documents
of Record Affecting the Property.........................16
3.6 Existence; Compliance with Laws..........................17
3.7 After-acquired Property..................................17
3.8 Taxes....................................................18
3.9 Insurance................................................19
3.10 Advances by the Trustee..................................21
3.11 Negative Covenants.......................................22
3.12 Base Rent................................................22
3.13 Books and Records; Financial Statements;
Notice of Default........................................23
3.14 Maintenance and Repair...................................23
3.15 Trustee Fees.............................................23
3.16 Environmental Condition..................................24
3.17 Conduct as Separate Entity...............................27
ARTICLE 4 - Possession, Use and Release of the Property....................27
4.1 Lease Termination........................................27
4.2 Condemnation.............................................28
4.3 Transfer of Owner's Interest in the Property.............28
ARTICLE 5 - Application of Moneys..........................................29
5.1 Moneys Under the Leases..................................29
5.2 Reserves.................................................30
ARTICLE 6 - Prepayment of Notes............................................32
6.1 Generally................................................32
6.2 Notice of Prepayment; Deposit of Money...................32
6.3 Optional Prepayment......................................33
ARTICLE 7 - Events of Default and Remedies.................................33
7.1 Events of Default........................................33
7.2 Sale of Property; Application of Proceeds................39
7.3 Purchase by Trustee......................................40
7.4 Receivers................................................40
7.5 Remedies Cumulative......................................40
7.6 Cross- Default and Cross-Collateralization of Notes......41
7.7 Waiver of Rights.........................................41
7.8 Waiver of Remedies.......................................41
7.9 Suits by Trustee.........................................41
7.10 Direction of Remedies....................................42
7.11 Suits by Registered Owners...............................42
7.12 Expenses and Services After an Event of Default..........42
ARTICLE 8 - The Trustee....................................................42
8.1 Right and Obligations of Trustee.........................42
8.2 Annual Certificate and Statement of Accounts.............48
8.3 Resignation and Removal of Trustee.......................48
8.4 Successor Trustee........................................48
8.5 Liability of Trustee.....................................49
8.6 Segregation of Moneys....................................49
8.7 Illegal Acts.............................................49
8.8 Communications to be Sent to Registered
Owners and to Owner......................................49
ARTICLE 9 - Supplements....................................................51
9.1 Supplements Without Consent..............................51
9.2 Supplements with Consent.................................51
9.3 Delivery of Supplements..................................52
ARTICLE 10 - Miscellaneous.................................................52
10.1 Immunity from Liability..................................52
10.2 Unclaimed Funds..........................................54
10.3 Security Agreement and Financing Statement...............54
10.4 Modifications; Waiver; Notices...........................56
10.5 Illegal Provision........................................57
10.6 Maximum Interest Payable.................................57
10.7 Satisfaction.............................................57
10.8 Binding Effect...........................................58
10.9 Counterparts.............................................58
10.10 Table of Contents; Headings..............................58
10.11 Governing Law. .........................................58
10.12 Estoppels................................................58
10.13 Attorneys'Fees...........................................58
ARTICLE 10 - Michigan Law Provisions.......................................59
11.1 Inconsistencies..........................................59
11.2 Additional Remedies......................................59
11.3 Waste....................................................59
11.4 Sale.....................................................59
11.5 Michigan Law.............................................59
11.6 Waiver...................................................60
11.7 Future Advances..........................................61
11.8 Judicial Foreclosure.....................................61
11.9 Trust Mortgage...........................................61
THIS TRUST MORTGAGE, dated as of June 28th, 1999 (herein called this
"Indenture"), between AGREE FACILITY NO. I, L.L.C., a Delaware limited
liability company ("Owner"), having an address at 31850 Northwestern Highway,
Farmington Hills, Michigan 48334, and MANUFACTURERS AND TRADERS TRUST
COMPANY, a New York banking corporation, as trustee (herein, together with
its successors as such trustee, called the "Trustee"), having an address at
One M&T Plaza, 7th Floor, Buffalo, New York 14203-2399, for the benefit of
the Registered Owners of Notes.
PRELIMINARY STATEMENT
The defined terms used herein but not otherwise defined have the
meanings set forth in Article 1.
Owner has a fee simple estate in four parcels of land (each a "Land
Parcel and collectively, the "Land Parcels") and fee title to the
Improvements located thereon. The Land Parcels are more fully described in
Schedule A-1 through Schedule A-4 hereto.
Owner is issuing its 6.63% Senior Secured Notes due February 5, 2017
in the original aggregate principal amount of $12,390,135.34 to the Note
Purchaser for the purpose of providing permanent mortgage financing for the
Property and paying related transaction expenses.
Owner is duly authorized to issue the Notes and Owner and the
Trustee are duly authorized to execute and deliver this Indenture, and all
actions required by law and all actions of Owner and the Trustee required
therefor have been duly taken.
GRANTING CLAUSES
NOW, THEREFORE, THIS INDENTURE WITNESSETH: in consideration of the
premises, the acceptance by the Trustee of the trusts created hereby, the
purchase and acceptance of Notes by the Registered Owners thereof, and in
order to secure the payment of the principal and interest and any premium and
other sums payable on the Notes and in all instances under this Indenture and
to secure the performance of the covenants and agreements contained in the
Notes and in this Indenture, Owner has executed and delivered this Indenture.
To secure payment of the Notes, Owner has created a security
interest in, granted, conveyed, mortgaged, warranted, assigned, bargained,
sold, pledged, given, transferred and set over, with power of sale and by
these presents does hereby create a security interest in, grant, convey,
mortgage, warrant, assign, bargain, sell, pledge, give, transfer and set over
unto the Trustee and to its successors and assigns forever all of Owner's
right, title and interest in, to and under all of the property described in
the following Granting Clauses, subject only to Permitted Encumbrances.
Granting Clause First
The entire right, title and interest of Owner in and to (a) the Land
Parcels and the Improvements, (b) all and singular the tenements,
hereditaments, easements, rights of way, rights, privileges and appurtenances
in and to the Property, belonging or in any way appertaining thereto,
including, without limitation, any streets, ways, alleys, vaults, gores or
strips of land adjoining each Land Parcel, together with all agreements and
other rights and benefits now or hereafter belonging or pertaining to the
Property, (c) all claims or demands of Owner in law or in equity, in
possession or expectancy of, in and to the Property and (d) subject to the
provisions of Granting Clause Second, all rents, income, revenues, issues,
awards, proceeds and profits from and in respect of the property described in
this Granting Clause First, it being the intention of the parties hereto
that, so far as may be permitted by law, all property of the character
hereinabove described which is now owned or held or is hereafter acquired by
Owner and affixed, attached and annexed to the Property shall be and remain
or become and constitute a portion of the Trust Estate and the security
covered by and subject to the Lien of this Indenture.
Granting Clause Second
The Leases, including the right to all renewal terms and all
extensions and renewals of the terms of the Leases, together with all the
rights, and the entire title and interest of Owner as lessor under the Leases
including, without limitation, the present and continuing right to make claim
for, collect, receive and receipt for any and all of the rents, income,
revenues, issues, awards, proceeds and profits and other sums of money
payable to or receivable by the lessor under the Leases, whether payable as
rent or otherwise, including, without limitation, sums of money receivable
thereunder by virtue of a release of existing easements or other rights in
the nature of easements, the present and continuing right to bring actions
and proceedings under the Leases or for the enforcement thereof and the
present and continuing right to do anything which Owner or any lessor is or
may become entitled to do under the Leases, provided that the assignment made
by this Granting Clause Second shall be subject to the provisions of the
Assignment and this Indenture and shall not impair or diminish any obligation
of Owner as lessor under the Leases nor shall any such obligation be imposed
upon the Trustee or the Registered Owners of the Notes.
Granting Clause Third
Subject to any mandatory provisions of the Leases, any and all
moneys and other property which may from time to time become subject to the
Lien of this Indenture or which may come into the possession or be subject to
the control of the Trustee pursuant to this Indenture, the Assignment or any
other instrument included in the Trust Estate, including, without limitation,
any funds held pursuant to Article 5, insurance proceeds (other than Owner's
title insurance) and all awards which may at any time be made to Owner for
the taking by eminent domain of the whole or any part of Owner's interest in
the Property or any easement therein and other property, if any, delivered to
the Trustee by or on behalf of Owner, it being the intention of Owner and it
being hereby agreed that all property hereafter acquired by Owner and
required to be subjected to the Lien of this Indenture or intended so to be
shall forthwith upon the acquisition thereof by Owner be subject to the Lien
of this Indenture as if such property were now owned by Owner and were
specifically described in this Indenture and Granted hereby or pursuant
hereto.
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now
owned or held or hereafter acquired, unto the Trustee and its successors and
assigns, upon the terms and conditions herein set forth for the equal and
ratable benefit and security of the Notes and for the enforcement of the
payment of the principal, premium and interest on the Notes in accordance
with their terms, and all other sums payable hereunder or under the Notes and
the performance and observance of the provisions of the Notes and this
Indenture, all as herein set forth.
PROVIDED, HOWEVER, that if Owner shall pay, perform and discharge
its obligations hereunder in full, then this Indenture and the estate hereby
granted shall cease, terminate and become void.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Notes are to
be issued under and secured by this Indenture and that the Trust Estate is to
be held by the Trustee upon and subject to the provisions of this Indenture.
ARTICLE 1
Definitions
Unless the context otherwise specifies or requires, the following
terms have the meanings specified below:
"Assignment" means the Assignment of Leases and Rents, relating to
the Leases, dated as of the date hereof, from Owner, as assignor, to the
Trustee as assignee, and consented to therein by Lessee, as amended or
supplemented from time to time as permitted hereby or thereby.
"Base Rent" means the minimum fixed annual rent payable pursuant to
each Lease.
"Business Day" means a day of the year on which banks are not
required or authorized to close in the State of New York.
"Chesterfield Lease" means the Lease, relating to the Land Parcel
described in Schedule A-1 hereof and the Improvements thereon, dated July 30,
1997, between Owner, as lessor and Lessee, as amended or supplemented from
time to time as permitted hereby or thereby, together with any short form
thereof for purposes of recording.
"Collection Account" means the account established by the Trustee
pursuant to Section 5.1
"Condemnation Gap Policy" has the meaning specified in Section
3.9(a)(v) herein.
"Corporate Trust Office" means the office of the Trustee at which
its corporate trust business is administered, which at the date hereof is
located at One M&T Plaza, 7th Floor, Buffalo, New York 14203-2399.
"default" means any act or occurrence which, with notice, lapse of
time or both, would constitute an Event of Default.
"Determination Date" means the day occurring 3 Business Days prior
to a day on which all or a portion of the Notes are to be prepaid pursuant to
Article 6.
"Environmental Report" means the phase I environmental site
assessment by Clayton Environmental Consultants, relating to the presence and
condition of any hazardous substances on the Property delivered pursuant to
the Note Agreement.
"Environmental Laws" shall mean and include, without limitation, the
Resource Conservation and Recovery Act, as amended by the Hazardous and Solid
Waste Amendments of 1984, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act of 1986, the Hazardous Materials Transportation Act, the
Toxic Substances Control Act, the Clean Air Act, the Federal Insecticide,
Fungicide and Rodenticide Act, the Clean Water Act, Michigan Compiled Laws
324.2130 et seq. and 324.20101 et seq. and all other applicable federal,
state and local environmental and common laws, ordinances, rules and
regulations, as any of the foregoing may have been or may be from time to
time be amended, supplemented or supplanted, and any other federal, state or
local laws, ordinances, rules and regulations, now or hereafter existing
relating to regulation or control of toxic or hazardous substances or
materials.
"Environmental Policy" has the meaning specified in Section
3.9(a)(vi) herein.
"Event of Default" means any act or occurrence of the character
specified in Section 7.1(a) through 7.1(k).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the regulations adopted pursuant thereto.
"Grand Blanc Lease" means the Lease, relating to the Land Parcel
described in Schedule A-2 hereof and the Improvements thereon, dated February
12, 1998, between Owner, as lessor and Lessee, as amended or supplemented
from time to time as permitted hereby or thereby, together with any short
form thereof for purposes of recording.
"Grant" means mortgage, grant, convey, assign, create a security
interest in, bargain, sell, pledge, give, transfer, warrant and set over.
"Hazardous Substance" means each and all substances or materials
regulated pursuant to any Environmental Laws, including, but not limited to,
asbestos, asbestos-containing materials, urea formaldehyde foam insulation,
and any other substance, emission or material now or hereafter defined as or
deemed to be a regulated substance, hazard substance, toxic substance,
pesticide, hazardous waste or any similar or like classification or
categorization thereunder, including, without limitation, petroleum and
petroleum products and radioactive materials.
"Improvements" means all buildings, structures and other
improvements now or thereafter located on each Land Parcel, and all
facilities, fixtures, machinery, apparatus, installations, equipment and
other property affixed to each Land Parcel.
"Indenture" means this original Trust Mortgage delivered by Owner,
together with any amendments or supplements thereto executed from time to
time.
"Installment Payment(s)" has the meaning specified in the Notes.
"Installment Payment Dates" has the meaning specified in the Notes.
"Institutional Investor" means any of the following persons existing
under the laws of the United States or any state thereof or of the District
of Columbia or of Canada or any province thereof: (i) any bank, bank holding
company, savings institution or trust company, acting for its own account or
in a fiduciary capacity, (ii) any charitable foundation or other eleemosynary
institution, (iii) any insurance company or fraternal benefit society, (iv)
any pension, retirement or profit sharing fund or trust for which any bank,
trust company or national banking association or investment advisor
registered under the Investment Advisers Act of 1940, as amended, is acting
as trustee or agent, or if self managed, having funds of at least
$50,000,000, (v) any investment company, as defined in the Investment Company
Act of 1940, as amended, (vi) any college or university, (vii) any
government, any public employees' pension or retirement system, or any other
governmental agency supervising the investment of public funds, (viii) a
"real estate investment trust", as defined in Section 856 of the Internal
Revenue Code of 1986, as amended, (ix) any finance company, (x) or any
financial services corporation.
"Land Parcel" and Land Parcels" each has the meaning specified in
the Preliminary Statement hereof.
"Leases" means the Waterford Lease, the Pontiac Lease, the Grand
Blanc Lease and the Chesterfield Lease.
"Lessee" means Walgreen Co., an Illinois corporation, as lessee
under each of the Leases, together with its successors by merger,
consolidation or acquisition of its assets in whole or in part.
"Lien of this Indenture" and terms of like import mean the lien or
security interest or other interest or charge Granted to the Trustee hereby
(including the after-acquired property clauses hereof) or subsequently
Granted hereunder or pursuant hereto to the Trustee.
"Majority Registered Owners" means the Registered Owners of a
majority in Outstanding Principal Amount of the Notes.
"Make-Whole Premium" means, with respect to each Note, (A) in the
event that the Reinvestment Yield shall, on the applicable Determination
Date, be greater than or equal to the interest rate payable on or in respect
of the Note, a premium equal to 0, and (B) in the event that the Reinvestment
Yield shall, on the applicable Determination Date, be less than the interest
rate payable on or in respect of the Note, a premium equal to (x) the sum of
the amounts representing the present values of the amount of each remaining
scheduled Installment Payment which would have been payable with respect to
the Note immediately prior to such prepayment or acceleration determined by
discounting (monthly on the basis of a 360-day year composed of twelve 30-day
months) each such amount utilizing a discount factor equal to the
Reinvestment Yield plus 50 basis points, less (y) the principal amount to be
prepaid with respect to the Note, but in no event less than 0.
"Note Agreement" means the Note Purchase Agreement, dated as of the
date hereof, between Owner and the Note Purchaser.
"Note Purchaser" means Teachers Insurance and Annuity Association of
America.
"Notes" means as of any particular time, the 6.63% Secured Notes of
the Owner, due February 5, 2017, and all Notes issued from time to time in
exchange or substitution therefor pursuant to Section 2.7.
"outstanding", with reference to the Notes, means, as of any
particular time, all Notes authenticated and delivered by the Trustee
pursuant to this Indenture, except: (a) Notes theretofore canceled by the
Trustee or delivered to the Trustee for cancellation pursuant to this
Indenture; (b) Notes for the payment or prepayment of which moneys in the
necessary amount shall have been deposited in trust with the Trustee,
provided that if such Notes are to be prepaid, notice of such prepayment
shall have been given as provided herein; (c) Notes in lieu of or in
substitution for which other Notes shall have been authenticated and
delivered pursuant to Section 2.7; and (d) Notes registered in the name of
Owner or Lessee thereof; provided, however, this clause (d) shall not be
construed to preclude any of the foregoing persons from acquiring any Note
and receiving an appropriate portion of amounts received by the Trustee with
respect to Notes held by such persons pursuant to the terms hereof.
"Outstanding Principal Amount" means as of the time of determination
the aggregate outstanding principal balance of the Notes.
"Overdue Rate" means 8.63% per annum but in no event greater than
the maximum rate permitted by applicable law.
"Owner" means Agree Facility No. I, L.L.C., a Delaware limited
liability company, together with any Person succeeding thereto by merger,
consolidation or acquisition of its assets in whole or in part together with
its successors and assigns as owner of any portion of its interest in the
Property.
"Parking Reserve Amount" means a monthly payment of $290.00.
"Performance Bond" means the Performance Bond obtained by Owner from
a surety company satisfactory to the Majority Registered Owners (such
satisfaction confirmed to the Trustee by notice in the form of Exhibit 3
attached hereto and made a part hereof) in an amount sufficient to pay the
then current Outstanding Principal Amount of the Notes.
"Permitted Encumbrances" as to the Property means the following: (a)
rights reserved to or vested in any public authority by the terms of any
right, power, franchise, grant, license, permit or provision of the law
affecting the Property, to (i) terminate such right, power, franchise,
license or permit, provided that the exercise of such right would not
materially impair the use of the Property or materially and adversely affect
the value thereof, or (ii) purchase, condemn, appropriate or recapture, or
designate a purchaser of, the Property or any portion thereof; (b) any liens
thereon for taxes, assessments, fees and other governmental and similar
charges referred to in Section 3.8, and any liens of mechanics, materialmen
and laborers for work or services performed or material furnished in
connection with the Property, in each case which are not due and payable, or
which are not delinquent to the extent that penalties for nonpayment may be
assessed, or the amount or validity of which are being contested as permitted
by Section 3.8(b); (c) easements, rights-of-way, servitudes, restrictions and
other minor defects, encumbrances and irregularities in the title to the
Property which do not materially impair the use of the Property or materially
and adversely affect the value thereof; (d) rights reserved to or vested in
any public authority to control or regulate or use the Property, which rights
do not materially impair the use of the Property or materially and adversely
affect the value thereof; and (e) matters acceptable to the Majority
Registered Owners which are identified as exceptions to title in the mortgage
policies of title insurance delivered to the Trustee pursuant to the Note
Agreement.
"Permitted Investments" means any one or more of the following:
(i) direct obligations of, or obligations guaranteed as to
timely payment of principal and interest by, the United States of America
("USA") or any agency or instrumentality thereof provided that such
obligations are backed by the full faith and credit of the USA;
(ii) repurchase obligations with respect to any security
described in clause (i) above entered into with a depository institution or
trust company (acting as principal) whose long-term unsecured debt
obligations have received one of the two highest ratings available for such
securities by at least two of Standard & Poor's Ratings Service; Fitch
Investors Service, Inc.; Moody's Investors Service, Inc. and Duff & Phelps
Credit Rating Co. (the "Rating Agencies); and
(iii) units of taxable money market funds which funds are
regulated investment companies, seek to maintain a net asset value of $1.00
per share and invest solely in obligations backed by the full faith and
credit of the USA or in repurchase obligations described in clause (ii)
above, and have been designated in writing by at least two of the Rating
Agencies in one of the two highest credit rating categories as Permitted
Investments with respect to this definition;
provided in each case that no such investment shall be purchased at a premium
to its face value (disregarding interest accrued to the date of acquisition)
and that no such investment shall have a maturity later than the earlier of
(x) the Business Day before the proceeds of such investment are anticipated
to be needed pursuant to Section 5.2, or (y) one year from the date of
acquisition.
"Person" means an individual, partnership, corporation, limited
liability company, trust, estate, unincorporated association, syndicate,
joint venture or organization, or a government or any department or agency
thereof.
"Pontiac Lease" means the Lease, relating to the Land Parcel
described in Schedule A-3 hereof and the Improvements thereon, dated November
13, 1997, between Owner, as lessor and Lessee, as amended or supplemented
from time to time as permitted hereby or thereby, together with any short
form thereof for purposes of recording.
"Property" means the Land Parcels together with the Improvements
thereon.
"Radius Agreement" means the Radius Agreement, dated the date
hereof, among the Owner, the Trustee and the members of Owner.
"Register" has the meaning specified in Section 2.4.
"Registered Owner" means any Person whose name appears on the
Register as the registered owner of any Note.
"Reinvestment Yield" means, at any Determination Date, with respect
to the Notes, the yield to maturity of either (i) the yield reported as of
11:00 A.M. (New York City time) on the Determination Date on the display
designated USD on the Bloomberg Financial Markets Screen (or such other
display as may replace such displays on the Bloomberg service or specify the
applicable data on any other generally available service) for actively traded
U.S. Treasury securities having a constant maturity equal to the maturity of
the Notes, or (ii) if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, the Treasury
Constant Maturity Series yields reported for the latest day for which such
yields shall have been so reported as of the Business Day next preceding the
Determination Date in Federal Reserve Statistical Release H-15 (519) (or any
comparable successor publication) for U.S. Treasury securities having a
constant maturity equal to the maturity of the Notes as of the Determination
Date; provided, however, if no maturity exactly corresponding to the maturity
of the Notes shall appear therein, yields for the two most closely
corresponding reported maturities shall be calculated pursuant to the
foregoing sentence and the Reinvestment Yield shall be interpolated from such
yields on a straight-line basis (rounding in each of such relevant periods,
to the nearest month).
"Reserve Account" means the account maintained pursuant to Section
5.2.
"Structural Reserve Amount" means a monthly payment of $982.57.
"Subordination Agreement" means the Subordination, Non-Disturbance
and Attornment Agreement, recorded contemporaneously with this Indenture,
between the Trustee and the Lessee.
"Trust Estate" means all property subject or intended to be subject
at any time to the lien hereof.
"Trustee" means Manufacturers and Traders Trust Company, a New York
banking corporation, together with its successors, as corporate trustee
hereunder.
"Waterford Lease" means the Lease, relating to the Land Parcel
described in Schedule A-4 hereof and the Improvements thereon, dated June 4,
1997, between Owner, as lessor and Lessee, as amended or supplemented from
time to time as permitted hereby or thereby, together with any short form
thereof for purposes of recording.
ARTICLE 2
The Notes
1.1 The Notes. The Notes may have such marks and such legends or
endorsements thereon as Owner may determine with the approval of the Majority
Registered Owners and as are not inconsistent with the provisions of this
Indenture and do not affect their enforceability, or as may be required to
comply with any legal requirement. Except for Notes issued pursuant to
Section 2.7 hereof, Notes may be issued only on the date of delivery of this
Indenture and on the date of delivery of supplements to this Indenture. On
those dates, Owner shall execute and deliver the Notes to the Trustee for
authentication, upon the written order of Owner signed by Owner's managing
member, requesting authentication and delivery of the Notes against payment
therefor. Owner shall also deliver to the Trustee on those dates an
incumbency certificate verifying the signature of Owner's managing member on
the Notes and on such written order. The Trustee shall authenticate and
deliver the Notes in accordance with such written order.
The Notes shall:
(1) be limited in aggregate original principal amount to
$12,390,135.34;
(2) be dated the date of issuance thereof (except for Notes issued
pursuant to Section 2.7);
(3) mature, unless sooner paid in full pursuant to this Indenture,
on February 5, 2017;
(4) bear interest on the unpaid principal amount thereof from the
date of issuance thereof at the rate of 6.63% per annum
payable monthly (computed on the basis of a 360 day year
consisting of twelve 30-day months);
(5) be due and payable (A) in one initial payment of interest only
from the date of the advance of funds under the Notes to July
5, 1999, and (B) thereafter in monthly Installment Payments of
principal and interest in arrears on the fifth (5th) day of
each month commencing on August 5, 1999 and continuing to and
including February 5, 2017 (the "Installment Payments"), such
Installment Payments to be in respective amounts specified on
the amortization schedule attached to each Note, the aggregate
amount of which is sufficient to fully amortize the Notes by
maturity and pay all interest due thereon, provided that if
any such Installment Payment is due on a day that is not a
Business Day, such Installment Payment shall be due on the
preceding Business Day;
(6) be prepayable only as provided in Articles 5 and 6 hereof; and
(7) be substantially in the form set forth in Schedule B hereto.
1.2 Execution of Notes. The Notes shall be signed on behalf of Owner
by a duly authorized member or officer of Owner.
1.3 Home Office Payment. The principal of, premium, if any, and
interest on the Notes shall be payable at the Corporate Trust Office by the
Trustee by wire or other transfer of immediately available funds in lawful
money of the United States of America, against presentation of the Notes for
notation of the payment or prepayment made thereon. Surrender of the Notes by
a Registered Owner shall occur only after payment in full in cash of all
indebtedness evidenced thereby, including payment at the maturity date of the
Notes, and only after a request for surrender, in writing, has been submitted
by the Owner. Notwithstanding the foregoing, if the Registered Owner of a
Note is an Institutional Investor, then the Trustee shall, until such Note
has been transferred on the Register in accordance with Section 2.7 (relating
to Transfer and Exchange of Notes) pay all amounts, including amounts that
will discharge all indebtedness evidenced thereby, which become due and
payable on such Note in accordance with written instructions of such
Registered Owner without presentation of such Note. Lessee has agreed to pay
Base Rent and any percentage rent due under each Lease to the Trustee in
advance on the first day of each calendar month, pursuant to the
Subordination Agreement. All payments of Base Rent received in advance of the
payment date under the Notes shall be invested in Permitted Investments.
Provided that no default or Event of Default has occurred and is continuing,
any interest earned on payments of Base Rent received by the Trustee in
advance of the payment date under the Notes shall be paid to Owner. Trustee
agrees to transmit payments and prepayments on the date payments are due
pursuant to the Notes and agrees to use reasonable efforts to transmit such
payments and prepayments to the Registered Owners of the Notes by noon
Eastern time of the due date under the Notes, it being agreed that if such
funds are not paid on the due date under the Notes, they shall be invested by
the Trustee overnight and the earnings thereon transmitted proportionally to
the recipients of the funds. In the event that the Trustee does not transmit
any such payment or prepayment received by Trustee before noon Eastern time
to such Registered Owner in immediately available funds on the Business Day
immediately following the date on which such payment or prepayment is due
under the Notes, the Trustee, in its individual capacity, shall pay per diem
interest on such payment or prepayment to such Registered Owner, or such
payment to Owner, at the higher of the "Federal Funds Rate" and the actual
rate of return received on such funds. Any payment received by Trustee after
Noon Eastern time on any Business Day shall be deemed to be received by
Trustee at 9:00 A.M. on the immediately following Business Day for purposes
of this section and will be transmitted to the Registered Owners of the Notes
by noon Eastern time on such following Business Day. Owner shall pay or cause
to be paid per diem interest to the Trustee on any payment received by the
Trustee after Noon Eastern time at the Overdue Rate from the date such
payment was actually received to the date such payment is deemed received
pursuant to the immediately preceding sentence.
1.4 Register. Trustee shall cause to be kept at the Corporate Trust
Office a register (the "Register") within the meaning of Section 163(f) of
the Internal Revenue Code of 1986 as amended, and any regulations thereunder,
for the registration or transfer of the Notes issued in registered form. The
Register shall be maintained by the Trustee, and the names and addresses of
the Registered Owners of the Notes, the transfers of the Notes and the names
and addresses of the transferees of the Notes shall be entered in the
Register under such reasonable regulations as the Trustee may prescribe.
1.5 Registered Owners. Owner and the Trustee may deem and treat the
Registered Owner of any Note as the absolute owner thereof (whether or not
such Note shall be overdue) for all purposes, and neither Owner nor the
Trustee shall be affected by any notice to the contrary, subject to Section
2.7 (relating to Transfer and Exchange of Notes), and payment of the
principal of, premium, if any, and interest on such Note shall be made only
to or upon the order of such Registered Owner. All such payments so made,
including, without limitation, all payments made pursuant to the second
sentence of Section 2.3, shall be valid and effectual to satisfy and
discharge the liability of Owner upon such Note to the extent of the sum or
sums so paid.
1.6 Certificate of Authentication. No Note shall be valid until it
has been authenticated by the execution by the Trustee of the certificate of
authentication thereon. The authentication and delivery by the Trustee of any
Note shall be conclusive evidence that such Note has been duly issued
hereunder and is entitled to the benefits and security of this Indenture.
1.7 Transfer and Exchange of Notes.
(1) Notes may be transferred only on the Register. Any Note may be
transferred on the Register if such Note is surrendered for cancellation at
the Corporate Trust Office and is accompanied by a transferee certificate
substantially in the form of Exhibit 1 to this Indenture and an assignment
substantially in the form of Exhibit 2 to this Indenture. Subject to the
provisions of Section 2.8 (relating to New Notes), a new Note shall be
executed by Owner and registered in the name of the transferee in a principal
amount equal to the original principal amount of such transferred Note and
shall be authenticated and delivered by the Trustee to the transferee in
exchange for such transferred Note.
(2) Any Note or Notes may be exchanged for a new Note or Notes if
such Note or Notes to be so exchanged are surrendered for cancellation at the
Corporate Trust Office and are accompanied by the request of the Registered
Owner thereof specifying the denomination of the new Note or Notes to be
issued in exchange therefor. Subject to the provisions of Section 2.8
(relating to New Notes), a new Note or Notes payable to such Registered Owner
shall be executed by Owner in the denomination so requested, and in an
aggregate principal amount equal to the aggregate original principal amount
of such Note or Notes to be so exchanged and shall be authenticated and
delivered by the Trustee to such Registered Owner in exchange for such Note
or Notes to be so exchanged. The Trustee shall not be required to make a
transfer or an exchange of any Note or Notes (i) for a period of ten days
preceding any payment date with respect thereto, which tenth day shall be the
record date for purposes of such payment date and any other purposes under
this Indenture or (ii) if, after giving effect to any such transfer or
exchange, there shall be more than two Registered Owners of Notes, in which
case each such additional Registered Owner in excess of the first two holders
of Notes may be paid at their option, by check or by wire transfer but shall
agree to pay to the Trustee the wire transfer expenses incurred in connection
with any payments on the Notes made to such Registered Owner.
(3) If any Note shall become mutilated or be destroyed, lost or
stolen, upon request of the Registered Owner thereof, a new Note payable to
such Registered Owner shall be executed by Owner in the same original
principal amount as such Note so mutilated, destroyed, lost or stolen and
shall be authenticated and delivered by the Trustee to such Registered Owner
in exchange for such Note, if mutilated, or in substitution for such Note, if
destroyed, lost or stolen, provided that (i) in the case of a mutilated Note,
such Note shall be surrendered for cancellation at the Corporate Trust
Office, and (ii) in the case of a destroyed, lost or stolen Note, the
Registered Owner thereof shall furnish to Owner and the Trustee such security
as may be reasonably required by them to save them harmless and to evidence
to their satisfaction the destruction, loss or theft of such Note and the
ownership thereof, provided, that, for an Institutional Investor, the
unsecured agreement of such Institutional Investor to indemnify the Trustee
and Owner with respect to such destroyed, lost or stolen Note shall satisfy
the conditions of this clause (ii) provided that such agreement includes a
representation that such person is an Institutional Investor.
1.8 New Notes. Each new Note (in this Section called a New Note)
issued pursuant to Section 2.7 (relating to Transfer and Exchange of Notes)
in exchange for, in substitution for, or in lieu of a Note (in this Section
called an Old Note) shall be dated the date of such Old Note. The Trustee
shall mark on each New Note (i) the date to which principal and interest have
been paid on such Old Note and (ii) the aggregate of all payments and
prepayments of principal made on such Old Note which are allocable to such
New Note. Interest shall be deemed to have been paid on such New Note to the
date to which interest was paid on such Old Note, and all payments and
prepayments of principal marked on such New Note, as provided in clause (ii)
above, shall be deemed to have been made thereon. No service charge shall be
made for any issuance of New Notes, but Owner may require payment of a sum
sufficient to cover any tax or other governmental charge that may be actually
incurred or imposed in connection with the issuance of such New Notes. All
new Notes issued pursuant to Section 2.7 in exchange for or in substitution
for or in lieu of Old Notes shall be valid obligations of Owner evidencing
the same debt as such Old Notes and shall be entitled to the benefits and
security of this Indenture to the same extent as such Old Notes.
1.9 Trustee as Agent. The Trustee is hereby appointed the agent of
Owner for the payment (Trustee shall not be obligated to use its own funds to
make such payment and shall only use funds made available to it under this
Indenture to make such payment), registration, transfer and exchange of
Notes, subject, in each instance, to the Trustee's compliance with the terms
of Sections 2.3 through 2.8.
ARTICLE 3
Particular Covenants
A. Owner hereby represents, warrants, covenants and agrees as
follows:
1.10 Title to the Property. As of the date hereof, Owner has good
and marketable fee simple title in and to, the Land Parcels and has good and
marketable fee simple title in and to the Improvements, in each case free and
clear of all liens, encumbrances, charges and other exceptions to title,
subject only to Permitted Encumbrances. Owner has full power and lawful
authority to Grant its interest in the Trust Estate to the Trustee in the
manner and form herein done or intended; and will preserve its title to its
interest in the Trust Estate subject only to Permitted Encumbrances and
except as permitted by this Indenture; and will forever warrant and defend
the same to the Trustee against the claims of all Persons. This Indenture
constitutes a valid first lien on Owner's interest in the Trust Estate,
subject only to Permitted Encumbrances.
1.11 Further Assurances. Owner will, at its expense, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all such further acts, instruments and assurances required by the
Trustee (the Trustee shall have no obligation to so require unless directed
by the Majority Registered Owners) or the Majority Registered Owners for the
better Granting to the Trustee of Owner's interest in the Trust Estate hereby
Granted or for carrying out the intention of, or facilitating the performance
of, this Indenture as it relates to Owner and Owner's interest in the Trust
Estate.
1.12 Recording. Owner will, upon the execution and delivery hereof,
and thereafter from time to time, cause this Indenture, each Lease or a
memorandum thereof (if such Lease or memorandum thereof has not already been
recorded), the Assignment, the Subordination Agreement, each supplement and
amendment to each of said instruments and financing statements with respect
thereto (collectively called the Recordable Documents), to be filed,
registered and recorded as may be required by law to publish notice of and
maintain the Lien of this Indenture upon the Trust Estate and to publish
notice of and protect the validity of the Leases and the Assignment. Owner
will, from time to time, perform or cause to be performed any other act as
required by law, and will execute or cause to be executed any and all further
instruments requested by the Trustee (at the direction of the Majority
Registered Owners) for such purposes. The Trustee shall be and is hereby
irrevocably appointed the agent and attorney-in-fact of Owner to execute,
deliver and file any financing, continuation and similar statements and
Trustee shall cause the same to be filed in a timely manner, from time to
time, as required by law. Subject to the limitation of liability in Article 8
of this Indenture, if an Event of Default shall have happened and be
continuing, the Trustee shall be and is hereby irrevocably appointed the
agent and attorney-in-fact of Owner to execute and deliver all such further
instruments; nothing in this sentence shall prevent any default in the
observance of this Section from becoming an Event of Default. To the extent
permitted by law, Owner will pay all recording taxes and similar fees
incident thereto and all out-of-pocket expenses, taxes and other similar
governmental charges directly incurred in connection with the preparation,
execution, delivery or acknowledgment of the Recordable Documents, any
instruments of further assurance and the Notes.
1.13 Payment of the Notes. Owner will punctually pay the principal,
interest, premium, if any, and all other sums to become due in respect of the
Notes in accordance with this Indenture and the Notes.
1.14 The Leases; the Assignment; Documents of Record Affecting the
Property. (a) At all times the Property shall be leased to Lessee under the
Leases in accordance with the terms of the Leases. Owner will punctually
perform or cause others to punctually perform all obligations, covenants and
agreements by it to be performed as lessor under the Leases in accordance
therewith, and will at all times do all things reasonably necessary to compel
performance by Lessee of all its obligations, covenants and agreements under
the Leases. Owner will give to the Trustee, and the Trustee will promptly
forward the same to the Registered Owners, notice of all defaults under each
Lease promptly within two (2) Business Days after obtaining actual knowledge
thereof. Owner will not amend or modify any Lease or give any waiver, consent
or notice thereunder, or take any action thereunder, without in each case
having obtained the prior written consent of the Majority Registered Owners.
Owner will maintain the validity and effectiveness of the assignment to the
Trustee of the Leases made by this Indenture and the Assignment, all as
specified in such documents and, except as expressly permitted by the Leases,
this Indenture or the Assignment, will take no action, and will not omit to
take any action, which action or omission would release Lessee from its
obligations or liabilities under the Leases or the Assignment, or would
result in the termination, amendment or modification or impair the validity
of any Lease or the Assignment. Notwithstanding the foregoing, Owner
specifically waives its right to terminate the Leases.
(b) Owner shall observe and perform, and cause to be observed and
performed, all duties required of the owner or operator of the Property under
any document of record affecting the Property.
1.15 Existence; Compliance with Laws.
(1) Owner will keep in full force and effect its existence,
franchises, rights and privileges as a limited liability company under the
laws of the State of Delaware, and will do or cause to be done all things
necessary to preserve and keep in full force and effect its right to own,
lease, mortgage and grant a security interest in property and to enforce
contracts in the state where the Property is located. Owner will comply with
or cause to be complied with (i) every law, or other legal requirement or
order of the United States, of any state or any other governmental authority
applicable to Owner, or applicable to Owner in its capacity as owner of its
interest in the Property insofar as it relates to the Property, and (ii) its
obligations under every contract, agreement or other instrument applicable to
Owner, or applicable to Owner in its capacity as owner of its interest in the
Property insofar as any such obligations relate to the Property or the
ownership, occupancy or use thereof.
(2) Upon twenty (20) days' advance notice, Owner may, at its
expense, contest or cause to be contested, by appropriate legal proceedings
conducted in good faith and with due diligence, its compliance with any law,
other legal requirement or order of the United States, any state or any other
governmental authority or any contract, agreement or other instrument, other
than this Indenture, the Notes or the Assignment; provided that (i) such
proceedings shall have the effect of preventing the collection of any
contested amount or other realization of value from the Trust Estate or any
part thereof or interest therein, the Base Rent or any other sums payable
under the Leases or any portion thereof to satisfy the same, (ii) the Trust
Estate, any part thereof or interest therein, the Base Rent or any other sums
payable under the Leases or any portion thereof could not be sold, forfeited
or lost by reason of such proceedings (assuming payment of any amounts due
and performance of any requirements are made upon final conclusion of such
proceedings and provided any pre-judgment remedy is stayed in a manner
satisfactory to the Majority Registered Owners), and (iii) such proceedings
shall not, in the discretion of the Trustee and the Majority Registered
Owners, subject the Trustee or the Registered Owners of the Notes to the risk
of any criminal or civil liability. Any contest with respect to any law,
rule, order, ordinance, regulation or other governmental requirement
affecting the Property conducted by Lessee shall constitute compliance
herewith by Owner.
1.16 After-acquired Property. All right, title and interest of Owner
in and to all improvements, alterations, substitutions, restorations and
replacements of, and all additions and appurtenances to the Property,
hereafter acquired by or released to Owner immediately upon such acquisition
or release and without any further Granting by Owner shall become part of the
Trust Estate and shall be subject to the Lien of this Indenture fully,
completely and with the same effect as though now owned by Owner and
specifically described in the Granting Clauses hereof; at any time Owner will
execute and deliver to the Trustee any document which the Majority Registered
Owners may require to subject the same to the Lien of this Indenture.
1.17 Taxes.
(1) Owner will do or cause to be done everything necessary to
preserve the Lien of this Indenture without expense to any Trustee or
Registered Owner of the Notes, including, without limitation, paying and
discharging or causing to be paid and discharged, whether or not payable
directly by Owner or subject to withholding at the source, (i) all taxes of
every kind and description, assessments, levies, fees, water and sewer rents
and charges and all other governmental charges, general, special, ordinary or
extraordinary, and all charges for utility or communications services, which
may at any time be assessed, levied or imposed upon Owner, the Trust Estate,
this Indenture, the indebtedness secured hereby or the revenues, rents,
issues, income, excess profits, sales or gross receipts of the Trust Estate,
or which may arise in respect of the occupancy, use, possession or operation
thereof, (ii) all income, excess profits, sales, gross receipts and any other
taxes, duties or imposts, whether similar or not in nature, assessed, levied
or imposed by any governmental authority on Owner, the Trust Estate or the
revenues, rents, issues, income, awards, proceeds and profits of the Trust
Estate, (iii) all transfer, recording, stamp and real property gain taxes
incurred upon the sale, transfer, foreclosure or other disposition of the
Trust Estate or any interest therein and (iv) all lawful claims and demands
of mechanics, laborers, materialmen and others which, if unpaid, might create
a lien on the Trust Estate, or on the revenues, rents, issues, income,
awards, proceeds and profits of the Trust Estate, unless, in each case, Owner
shall contest the amount or validity thereof in accordance with Section
3.8(b) hereof. Notwithstanding the foregoing or any other provision of this
Indenture, Owner shall not be required to pay any income, profits or revenue
tax upon the income of either Trustee or any Registered Owner of the Notes
(other than Owner) nor any franchise, excise, corporate, estate, inheritance,
succession, capital levy, transfer or similar tax or any other tax described
in clause (ii) of this Section 3.8(a) of the Trustee or any Registered Owner
of the Notes (other than Owner) nor any interest, additions to tax or
penalties in respect thereof, nor any withholding taxes relating thereto,
unless, and only to the extent, such is imposed, levied or assessed in
substitution for any tax that Owner is required to pay pursuant to this
Section 3.8(a).
(2) Upon twenty (20) days' advance notice, Owner, at its expense,
may contest or cause to be contested, by appropriate legal proceedings
conducted in good faith and with due diligence, the amount or validity or
application, in whole or in part, of any item specified in Section 3.8(a)
above or lien for such item; provided that (i) such proceeding shall have the
effect of preventing the collection of any contested amount or other
realization of value from the Trust Estate or any part thereof or interest
therein, the Base Rent or any other sums payable under the Leases or any
portion thereof to satisfy the same, (ii) the Trust Estate, any part thereof
or interest therein, the Base Rent or any other sums payable under the Leases
or any portion thereof, could not be sold, forfeited or lost by reason of
such proceedings (assuming payment of any amounts due and performance of any
requirements are made upon final conclusion of such proceedings and provided
any pre-judgment remedy is stayed in a manner satisfactory to the Majority
Registered Owners), (iii) such proceedings shall not affect the ownership,
use or occupancy of the Property or the Trustee's ability or right to
exercise their remedies hereunder, including without limitation, foreclosure
against the Trust Estate, (iv) such proceedings shall not, in the discretion
of the Trustee and the Majority Registered Owners of the Note, subject the
Trustee or the Registered Owners of the Notes to the risk of any criminal or
civil liability and (v) Owner shall establish, or cause to be established,
reserves adequate, in the opinion of the Majority Registered Owners, to pay
such item specified in Section 3.8(a) above, together with any interest or
penalties which may accrue during the prosecution of such contest.
1.18 Insurance.
(1) Owner shall maintain or cause to be maintained valid and
enforceable insurance of the following character with respect to the
Property:
(1) "all risk" insurance coverage against losses by fire and
lightning, hurricane, flood and earthquake, and other risks
for the full insurable replacement value on a per occurrence
basis of the Improvements and other property which constitute
part of the Property, with agreed amount endorsement or
endorsements providing equivalent protection, including loss
by windstorm, hail, explosion, riot (including riot attending
a strike), civil commotion, aircraft, vehicles, smoke damage,
and vandalism and malicious mischief in amounts not less than
the full insurable value of all buildings and other
improvements on the Property. The term "full insurable value"
as used herein means the actual replacement cost, including
the costs of debris removal, but excluding the cost of
constructing foundations, footings and excavations.
(2) Comprehensive general public liability insurance covering the
legal liability of Owner and Lessee against claims for bodily
injury, death or property damage, occurring on, in or about
the Property or occurring as a result of ownership of
facilities located on the Property, with "single limit"
coverage in the minimum amount of Three Million Dollars
($3,000,000) in respect of personal injury or death and One
Million Dollars ($1,000,000) with respect to property damage,
with riders attached naming the Owner and the Trustee as
additional insured. Coverage shall be carried on an occurrence
basis with respect to any one occurrence, accident , disaster
or incidence of negligence. Coverage shall include
"premises/operations", independent contractors" and "blanket
contractual" liabilities.
(3) Public liability and hazard insurance required to be
maintained by the owner or occupant of the Property under any
contract, agreement or recorded document affecting the
Property.
(4) Rent loss insurance sufficient to pay one year of Base Rent
under each Lease.
(5) Fully paid single premium policies of insurance issued by
Chubb Custom Insurance Company insuring against loss of rent
and/or cancellation of each Lease by reason of condemnation
(the "Condemnation Gap Policy"). Owner shall take all actions
necessary to keep the Condemnation Gap Policy in full force
and effect.
(6) Fully paid single premium insurance policies issued by
American International Specialty Lines Insurance Company
insuring against loss of rent and/or cancellation of each
Lease by reason of the failure of the Property to comply with
all Environmental Laws (the "Environmental Policy").
(7) Worker's compensation and employer's liability insurance in
all states in which the Property and any other operations of
Owner are located and any other state in which Owner or its
contractors or subcontractors may be subject to any statutory
or other liability arising in any manner whatsoever out of the
actual or alleged employment of others.
(8) Such other insurance, in such amounts and against such risks,
as is customarily maintained by operators of similar
properties.
Such insurance shall be written by companies of recognized financial standing
which have a claims paying ability rating of at least A by national
statistical rating organizations, and are legally qualified to issue such
insurance, and are acceptable to the Majority Registered Owners and shall
contain a standard mortgagee clause naming the Trustee as an additional
insured and loss payee. Notwithstanding anything to the contrary contained in
this Section 3.9, Lessee may self-insure the insurance required under
Sections 3.9 (a) and (b) so long as the net worth of Lessee exceeds two
hundred million dollars ($200,000,000).
(2) Every insurance policy maintained pursuant to this Section 3.9
shall be satisfactory in form and substance to the Majority Registered Owners
and shall: (i) name the Trustee as an additional insured as its interests may
appear; (ii) contain a standard first mortgagee endorsement naming the
Trustee as first mortgagee and loss payee; (iii) provide that the insurer
waives all rights of subrogation against Owner, any successor to the Owner's
interest in the Property, and the Trustee; (iv) provide that thirty (30) days
prior written notice of cancellation, modification, termination or lapse of
coverage shall be given to the Trustee and that such insurance, as to the
interest of the Trustee, shall not be invalidated by any act or neglect of
Lessee or of Owner or any other owner of the Property, nor by any change in
the title ownership of the Property, nor by occupation of the Property for
purposes more hazardous than that which is generally associated with retail
businesses; and (v) be primary and without right or provision of contribution
as to any other insurance carried by Owner or any other interested party; and
(vi) in the event any insuring company is not domiciled within the United
States of America, include a United States service of suit clause (providing
any actions against the insurer by the insureds are conducted within the
jurisdiction of the United States of America).
(3) Owner shall deliver to the Trustee upon the execution and
delivery of this Indenture certificates of insurance (signed by an authorized
insurance company representative), reasonably satisfactory to the Majority
Registered Owners, evidencing all the insurance which is then required to be
maintained hereunder and, within thirty (30) days prior to the expiration of
any such insurance, deliver certificates of insurance evidencing the renewal
of such insurance (signed by an authorized insurance company representative)
evidencing the renewal of such insurance. Owner shall deliver annually to the
Registered Owners of the Notes certification that Owner has maintained or has
caused the Lessee to maintain all policies of insurance required to be in
full force and effect under this Indenture.
(4) Neither Lessee nor Owner shall obtain or carry separate
insurance concurrent in form or contributing in the event of loss with that
required to be furnished hereunder unless the Trustee is included therein as
additional insured, with loss payable as in this Indenture provided. Owner
shall immediately notify the Trustee whenever any such separate insurance is
obtained and shall deliver to the Trustee the policy or policies or
certificates evidencing the same.
(5) Owner shall comply and, so long as any Lease is in effect, shall
use its best efforts to cause Lessee to comply with all of the terms and
conditions of each insurance policy maintained pursuant to the terms of this
Indenture.
1.19 Advances by the Trustee. If Owner shall fail to perform or
cause to be performed any of the covenants contained in Section 3.2, 3.3,
3.6, 3.8 or 3.9, the Registered Owners may deposit such funds necessary to
perform the same on Owner's behalf, provided, with respect to Sections 3.6
and 3.8, that such performance is not then being contested in compliance with
Sections 3.6(b) or 3.8(b), and all sums so paid shall be secured hereby. Once
the Trustee shall have received sufficient funds from the Registered Owners
and upon written notice to do so from the Majority Registered Owners, upon
not less than ten (10) days notice to Owner (except in case of emergency in
which event notice shall be made as soon as reasonably practicable
thereafter), the Trustee shall make payments as directed in writing by the
Majority Registered Owners to the Trustee. If the Trustee is not provided
sufficient funds to make such payment, the Trustee shall not be obligated to
perform notwithstanding any direction from the Majority Registered Owners.
Owner shall repay on demand all sums so paid on its behalf with interest at
the Overdue Rate, such interest to be computed from and including the date of
the making of such payment to but excluding the date of such repayment.
1.20 Negative Covenants. Owner will not (i) sell, lease, transfer,
convey, assign or otherwise dispose of its interest in the Trust Estate or
any part thereof except as expressly permitted in Section 4.3 of this
Indenture; (ii) claim any credit on, or make any deduction from interest or
premium, if any, on the principal of the Notes by reason of payment of any
taxes levied or assessed or to be levied or assessed on the Trust Estate or
any part thereof; (iii) create or (subject to Owner's rights to contest
pursuant to Sections 3.6(b) and 3.8(b)) suffer to be created, directly or
indirectly, any mortgage, lien, encumbrance, charge or other exception to
title or ownership upon it or against its interest in the Trust Estate or any
part thereof, other than (y) Permitted Encumbrances, and (z) as otherwise
expressly permitted by this Indenture; (iv) make or permit to remain
outstanding any loan to any person except as expressly permitted by this
Indenture; (v) own or acquire any stock or securities of any Person or
guarantee any obligation of any Person; (vi) engage directly or indirectly in
any business other than the acquisition and ownership of its interests in and
leasing of the Property; (vii) use moneys from any employee benefit plan (as
defined in ERISA) established by Owner to perform any of Owner's obligations
under this Indenture or transfer any of its interests in the Trust Estate to
any such employee benefit plan; or (viii) create, assume, suffer to exist or
guarantee any indebtedness for borrowed money other than the Notes, except as
expressly permitted by this Indenture.
1.21 Base Rent. The sum of the monthly payments of Base Rent under
the Leases is at least equal to 105% of the sum of the Installment Payment,
the Parking Reserve Amount, the Structural Reserve Amount and Trustee fees
due on the related Installment Payment Date pursuant to the Notes and this
Indenture. Such payments of Base Rent are sufficient to amortize the Notes in
the manner and on the terms set forth in the Notes.
1.22 Books and Records; Financial Statements; Notice of Default.
(1) Owner will (i) keep accurate records and books of account
reflecting all its financial transactions and (ii) permit the Trustee and any
Registered Owner of Notes, at their expense (except during the continuance of
an Event of Default, in which case, at Owner's expense), by their agents,
accountants and attorneys, to inspect the Property and to visit the offices
of Owner and examine its records and books of account and to discuss its
affairs, finances and accounts with Owner and its accountants at such
reasonable times during business hours as may be requested by the Trustee or
by any Registered Owner of the Notes on reasonable notice to Owner.
(2) Owner shall provide its balance sheet, income statement and
statement of cash flow to the Trustee (and the Trustee shall deliver same, at
Owner's expense, to the Registered Owners of the Notes), annually no later
than ninety (90) days after the end of the calendar year, or otherwise on
request of the Majority Registered Owners, but no more than four times per
year and Owner shall represent that such financial statements are true and
correct. Notwithstanding the foregoing, if an Event of Default has occurred
and is continuing, on the request of the Majority Registered Owners Owner
shall deliver such financial statements monthly to the Trustee (and the
Trustee shall deliver same, at Owner's expense, to the Registered Owners of
the Notes).
(3) Owner shall certify to Trustee on a quarterly basis (no later
than thirty (30) days after the end of each calendar quarter) that there have
been no events of default under either this Indenture or the Leases. In any
event, Owner will notify the Trustee of the occurrence of any default or
Event of Default under the Notes, the Leases or this Indenture promptly, and
in any event, within two (2) Business Days after becoming aware of such
occurrence, and the Trustee will promptly, and in any event, within two (2)
Business Days, by immediate facsimile transmission, forward a copy of any
such notice to the Registered Owners of the Notes.
1.23 Maintenance and Repair. Owner will observe and perform its
maintenance and reconstruction obligations under the Leases and will enforce
the provisions of the Leases requiring the Lessee to maintain and repair the
Property.
1.24 Trustee Fees. Owner will pay or cause to be paid, as the same
become due and payable, all fees, disbursements and other amounts payable to
Trustee, including reasonable attorneys' fees and court costs, acting in the
capacity of trustee under this Indenture and payable to Trustee for taking
any other actions pursuant to the Indenture, such payments to be made in
accordance with the Fee Schedule set forth on Exhibit 4 attached hereto and
made a part hereof.
1.25 Environmental Condition.
Owner represents and warrants to the Trustee and to the
Registered Owners of the Notes that, to the best of Owner's knowledge except
as described in the Environmental Report:
(i) the Property complies with all Environmental Laws;
(1) no notices, complaints or orders of violation or
non-compliance with Environmental Laws have been received by
Owner and to the best of Owner's knowledge, no federal, state
or local environmental investigation or proceeding is pending
or threatened with regard to the Property or any use thereof
or any alleged violation of Environmental Laws with regard to
the Property;
(2) the Property has not been used by Owner or, to the best of
Owner's knowledge, by any prior owner to generate,
manufacture, refine, produce, or process, or to store, handle,
dispose, treat, transfer or transport any Hazardous Substance
(except in connection with the maintenance and operation of
the Property in commercially reasonable quantities as a
consumer thereof, and except for storage of such household or
commercial products as are customarily sold in similar retail
establishments, and in either case in compliance with
Environmental Laws);
(3) no underground storage tanks or surface impoundments have been
installed in the Property in violation of applicable
Environmental Laws and there exists no Hazardous Substance
contamination to the Property which originated on or off the
Property;
(4) the Property is free of Hazardous Substances the removal of
which is required, or the maintenance of which is prohibited
or penalized by any Environmental Law; and
(5) the Property is not a facility as defined in part 201,
M.C.L.A. Section 324.20101 et seq.
Owner agrees that it (i) shall comply, and cause the Property
to comply, with all Environmental Laws applicable to the Property, (ii) shall
prohibit the use of the Property for the generation, manufacture, refinement,
production, or processing of any Hazardous Substance or for the storage,
handling, disposal, treatment, transfer or transportation of any Hazardous
Substance (other than in connection with the operation and maintenance of
such Property and in commercially reasonable quantities as a consumer thereof
and except as to such household or commercial products customarily sold in
similar retail establishments, subject to, in any event, compliance with
Environmental Laws), (iii) shall not install or permit the installation on
the Property of any underground storage tanks or surface impoundments and
shall not permit there to exist any contamination to the Property originating
on or off the Property (other than in connection with the use, operation and
maintenance of the Property and then only in compliance with applicable
Environmental Laws and all other applicable laws, rules, orders, ordinances,
regulations and requirements now or hereafter enacted or promulgated of every
government and municipality having jurisdiction over such Property and of any
agency thereof) or asbestos-containing materials and (iv) shall cause any
alterations of Property to be done in a way so as to not expose the persons
working on or visiting the Property to Hazardous Substances and in connection
with any such alterations shall remove any Hazardous Substances present upon
the Property which are not in compliance with Environmental Laws or which
present a danger to persons working on or visiting the Property.
Owner agrees to protect, defend, indemnify and hold harmless
Trustee, the Registered Owners of the Notes and their officers, employees,
agents, successors and assigns from and against any and all liability,
including all foreseeable and all unforeseeable damages including but not
limited to attorney's and consultant's fees, fines, penalties and civil or
criminal damages, directly or indirectly arising out of the use, generation,
storage, treatment, release, threatened release, discharge, spill, presence
or disposal of Hazardous Substances from, on, at, to or under the Property,
and including, without limitation, the cost of any required or necessary
repair, response action, remediation, investigation, cleanup or
detoxification and the preparation of any closure or other required plans,
whether such action is required or necessary prior to or following transfer
of title to the Property. This agreement to indemnify and hold harmless shall
be in addition to any other obligations or liabilities Owner may have to
Trustee and the Registered Owners of the Notes at common law under all
statutes and ordinances or otherwise, and shall survive the expiration or
termination of this Indenture without limit of time. Owner expressly agrees
that the representations, warranties and covenants made and the indemnities
stated in this Indenture are not personal to Trustee and the Registered
Owners of the Notes, and the benefits under this Indenture may be assigned to
subsequent parties in interest, which subsequent parties in interest may
proceed directly against Owner to recover pursuant to this Indenture.
As soon as reasonably possible after obtaining knowledge
thereof, Owner shall give to Trustee notice (a copy of which Trustee shall
promptly forward to the Registered Owners of the Notes) of the occurrence of
any of the following events: (i) the failure of the Property to comply with
any Environmental Law in any manner whatsoever; (ii) the receipt by Owner of
any notice, complaint or order of violation or non-compliance of any nature
whatsoever with regard to the Property or the use thereof with respect to
Environmental Laws; (iii) the receipt by Owner of any notice of a pending or
threatened investigation or proceeding that the operations on the Property
are not in compliance with any Environmental Law; or (iv) the migration or
release, or a threat of migration or release of any Hazardous Substance from
the Property to other property or to the Property from other property. Owner
shall have the right to contest, by appropriate proceedings, diligently
conducted, any notice, complaint, order or finding of violation or
non-compliance with any Environmental Laws affecting the Property or any use
thereof in accordance with Section 3.6(b). If Owner determines that the
Property is in violation of an Environmental Law, Owner will promptly give
the Trustee written notice thereof (a copy of which Trustee shall promptly
forward to the Registered Owners of the Notes).
At any time that an Event of Default shall have occurred and
be continuing, or a notice, complaint, or order or finding of violation or
non-compliance with Environmental Laws shall have been issued with respect to
the Property, of which the Trustee has received written notice, the Trustee,
after prior reasonable notice to Owner, may, and shall if directed to do so
by the Majority Registered Owners, cause to be performed an environmental
audit or risk assessment of the related Property and the then uses thereof.
Such an environmental audit or assessment shall be performed by an
environmental consultant selected by the Majority Registered Owners and shall
include a review of the uses of the Property and an assessment of the
possibility of violation or non-compliance of the same with Environmental
Laws. All reasonable costs and expenses actually incurred by Trustee in
connection with such environmental audit or assessment shall be secured
hereby and billed directly to and paid by Owner; provided, however, the
Trustee shall not be obligated to expend its own funds or incur any expense
or cost unless funds are advanced to the Trustee or security for repayment
thereof satisfactory to the Trustee is made available to it.
If at any time an event or condition shall have occurred and
be continuing which results in the Property being in violation of any
Environmental Law, or a notice, complaint, or order or finding of violation
or non-compliance with any Environmental Law shall have been received by
Owner with respect to the Property, Owner shall, or shall cause Lessee to,
diligently perform all remedial work to the Property at Owner's or Lessee's
own cost and expense to bring the Property into full compliance with
Environmental Laws and the requirements of this Section 3.16 by not later
than the earlier of (A) twelve months from the date of discovery of such
condition, (B) the end of the initial term of the related Lease and (C) the
imposition of any monetary fine or penalty against Owner or Lessee as a
result of such violation.
1.26 Conduct as Separate Entity. The Owner shall keep its books and
records, including, without limitation, financial statements, separate from
those of all other Persons, maintain bank accounts (if any) separate from
those of any other Person, conduct business exclusively in its own name, pay
its obligations (including salaries of its own employees) out of its own
funds and conduct all correspondence on its own letterhead and use its own
invoices and checks. The Owner will not commingle its funds or assets with
those of any other Person. The Owner will not enter into any agreement for
the sharing, pooling or division of equity, profits, losses, benefits or cash
flow. The Owner will observe all legal formalities of its independent
existence, maintain its books and records as its own official records and
conduct all of its activities as an entity independent of any other Person
and maintain an arm's-length relationship with its affiliates. The Owner has
not failed, and will not fail, to correct any misunderstanding regarding its
separate identity. The Owner will maintain adequate capital and personnel in
light of its contemplated business operations and will hold itself out as a
separate entity.
ARTICLE 4
Possession, Use and Release of the Property
1.27 Lease Termination.
(1) Promptly, and in any event, within two (2) Business Days after
receipt by Owner of any notice from Lessee pursuant to Paragraphs 14 or 29 of
any Lease that Lessee proposes to cancel such Lease, Owner will furnish to
the Trustee a copy of such notice and any certificate, opinion or other
communication delivered in connection therewith, and the Trustee shall
promptly forward a copy of the same to the Registered Owners of the Notes. In
the event of the termination of a Lease pursuant to Paragraph 14 of such
Lease, Owner shall pay to the Trustee, in accordance with paragraph (b)
below, an amount sufficient to prepay, on the scheduled termination date, the
Notes and any accrued interest on the Notes. In the event of the termination
of a Lease pursuant to Paragraph 29 of such Lease, Owner shall pay to the
Trustee, in accordance with paragraph (b) below, an amount sufficient to
prepay, on the scheduled termination date, a portion of the Notes equal to
the "Allocated Payment" with respect to such terminated Lease calculated as
set forth on Exhibit 5. Upon such prepayment the Trustee shall, at the
direction of the Majority Registered Owners, prepare a new amortization
schedule with respect to the Notes. If Owner shall not make such payment, the
Trustee may, and shall if directed to do so by the Majority Registered
Owners, declare a default pursuant to Section 7.1(a).
(2) If Lessee shall elect to cancel any Lease pursuant to Paragraphs
14 or 29 of such Lease and if Owner shall make the payment referred to in
paragraph (a) above, the Trustee, on the scheduled termination date, shall
execute and deliver to Owner an instrument reasonably satisfactory in form
and substance to Owner releasing the portion of the Property related to such
Lease from the Lien of this Indenture and from the Assignment promptly after
receipt of such payment, together with all other sums then due and payable
under the Indenture. Payments received by the Trustee pursuant to this
Section 4.1(b) shall be applied pursuant to Article 5 (relating to
Application of Moneys).
1.28 Condemnation. Owner, promptly upon obtaining actual knowledge
of any proceedings for the taking of the Property or any part thereof in
condemnation or other eminent domain proceeding, shall notify the Trustee of
the pendency thereof and the Trustee shall promptly forward a copy of such
notice to the Registered Owners of the Notes. The Trustee may, and shall if
directed to do so by the Majority Registered Owners, participate in such
proceedings at the expense of Owner, and Owner will deliver all instruments
reasonably requested by the Trustee to permit such participation. Any award
or compensation payable in such proceedings to Owner or assigned (directly or
indirectly) to Owner by Lessee is hereby assigned to and shall be paid to the
Trustee, subject to the rights thereto of Lessee pursuant to the related
Lease. The Trustee shall be under no obligation to question the amount of the
award or compensation and may accept the same on behalf of the Registered
Owners of the Notes. In any such proceeding the Trustee may be represented by
counsel satisfactory to it, or as may be directed by the Majority Registered
Owners, and Owner shall pay the reasonable attorneys' fees and expenses
therefor. Any award or compensation so received shall be applied pursuant to
Article 5.
1.29 Transfer of Owner's Interest in the Property. Owner shall not,
directly or indirectly, transfer the legal, equitable or beneficial title to
the Property or any interest therein without the prior written consent of the
Majority Registered Owners. A transfer of record or beneficial ownership of
any equity interest in Owner shall be deemed a transfer subject to this
section. Consent to a transfer may be granted or withheld in the sole
discretion of the Majority Registered Owners. Notwithstanding the foregoing,
in no event may Owner directly or indirectly transfer the legal, equitable or
beneficial title to the Property or any interest therein unless Owner has
paid to the Trustee all unpaid principal and interest, plus Make Whole
Premium and all other sums payable hereunder or with respect to the Notes.
ARTICLE 5
Application of Moneys
1.30 Moneys Under the Leases.
(1) Unless and until a default shall have occurred and be
continuing, moneys received by the Trustee as Base Rent or percentage rent
under the Leases pursuant to the Assignment and the Subordination Agreement
and any late charge on any overdue installment thereof shall be deposited in
a separate account established by the Trustee (the "Collection Account") and
applied as follows:
(1) to the payment of trustee fees pursuant to Section 3.15
hereof;
(2) to the Installment Payments required to be made on the Notes
(and interest on any overdue amount thereof) on or about the
date on which such Base Rent is due, and if insufficient to
pay such amount in full, pro rata to each Registered Owner in
proportion to the amount of the Installment Payment required
to be made on the Note held by such Registered Owner, and then
to any other sums then due and owing hereunder; and
(3) to the Reserve Account, the Structural Reserve Amount; and
(4) to the Reserve Account, the Parking Reserve Amount; and
(5) to the payment or performance of any obligation of Owner under
any of the Leases which remains unpaid or unperformed; and
(6) the excess, if any, of any Base Rent or other payment after
the application thereof pursuant to clauses (i) through (v)
hereof shall be paid to Owner; provided, however, that if an
Event of Default shall have occurred and be continuing, such
excess shall be retained by the Trustee as security for
Owner's obligations under this Indenture.
(2) Unless and until a default shall have occurred and be
continuing, any moneys held by the Trustee, including the moneys held on
deposit in the Collection Account and the Reserve Account shall be invested
in Permitted Investments (except for moneys being held by the Trustee
overnight). Any interest earned on amounts on deposit in the Collection
Account or in the Reserve Account shall be deposited into the Collection
Account or into the Reserve Account, as the case may be, and shall thereafter
become part of such account.
(3) If a default shall have occurred and be continuing, any amounts
held by Trustee pursuant to Section 5.1(a)(v) above shall, at the option of
the Majority Registered Owners, be applied to the prepayment of the Notes at
a price equal to the principal amount thereof to be prepaid, plus accrued and
unpaid interest thereon and a Make Whole Premium. If the default is cured
within any permitted cure period, if any, and all costs associated with such
cure are paid, any remaining balance of such funds shall be paid to Owner.
(4) Any other moneys, including expense reimbursements, received by
the Trustee under the Leases pursuant to the Assignment shall be applied by
it to the purposes for which such moneys were paid (including, where
applicable, to the reimbursement of Owner for monies paid for Lessee's
account pursuant to any Lease). Late charges or interest on delinquent
payments under any Lease shall be available for application to interest on
the Notes at the Overdue Rate.
1.31 Reserves.
(1) Each month, Owner shall deposit with the Trustee an amount equal
to the sum of the Structural Reserve Amount and the Parking Reserve Amount,
which shall be held by the Trustee in a separate account (the "Reserve
Account"). All sums on deposit from time to time in the Reserve Account,
including interest earned thereon, are for the benefit of Owner but shall be
held by the Trustee in a separate account as security for the performance by
Owner of its obligations under the Leases. Owner hereby grants to the Trustee
a security interest in such sums.
(2) Amounts on deposit in the Reserve Account are held for the
purpose of securing Owner's obligations to make certain capital repairs and
replacements under the Leases (including parking lot light structures,
parking areas, roof and building structures). If Owner shall fail to perform
or cause to be performed any of its obligations or covenants contained in any
Lease of which the Trustee has actual notice and following notice to the
Registered Owners, the Trustee, at the direction of the Majority Registered
Owners, may withdraw from the Reserve Account the funds necessary to perform
the same on Owner's behalf, and all sums so paid shall be secured hereby.
Within three days, Owner shall redeposit or cause to be redeposited into the
Reserve Account the amount of such sums expended by the Trustee on Owner's
behalf. In addition, the Trustee shall withdraw funds from the Reserve
Account, up to the amount of funds then on deposit in the Reserve Account,
and reimburse Owner for any amounts actually paid by Owner for capital
repairs and replacements required by the Leases to be made by Owner, provided
that no Event of Default shall have occurred and be continuing and provided
further that Owner shall have delivered to the Trustee (i) copies of bills
from contractors showing that such repairs and replacements have actually
been performed, (ii) evidence in a form satisfactory to the Majority
Registered Owners that such bills have been paid and (iii) a certificate,
signed by an authorized officer of Owner, certifying that (A) such repairs
and replacements are complete and have been properly performed, (B) Owner has
discharged in full its obligations under the applicable Lease with respect to
the completion of such repairs and replacements, and (C) no event of default
by Owner shall have occurred and be continuing under such Lease with respect
to the completion of such repairs and replacements. To the extent such funds
have not been called upon pursuant to the preceding sentence, the Trustee
shall pay to Owner the balance of such funds upon the payment in full of the
Notes
1.32 Proceeds of Insurance, Condemnation Awards, Minor Releases.
Moneys received by the Trustee as payment for loss under any policy of
insurance (other than the Condemnation Gap Policy, the Environmental Policy,
rent loss or mortgage title insurance) or as an award or compensation for the
taking, in condemnation or other eminent domain proceedings, of the Property
or any part thereof or interest therein or a conveyance to a condemning
authority on a negotiated basis in lieu of condemnation, shall be paid as
provided in the Leases. If such amounts exceed the amount required to be paid
for restoration of the Property, the excess shall, at the option of the
Majority Registered Owners, be retained by the Trustee and be applied in
their entirety on the next Installment Payment Date, but after payment of the
regular Installment Payment due on such date, to the prepayment in whole or
in part, as the case may be, of the unpaid principal amount of the Notes,
plus accrued and unpaid interest thereon to the date fixed for payment, at a
price equal to 100% of the principal amount thereof to be prepaid, without a
Make-Whole Premium and allocated among the Notes in accordance with Section
6.2(b) (relating to Prepayment of Notes) and the balance, if any, after such
prepayment and all other amounts to be paid hereunder shall be paid to Owner
in the case of condemnation awards or Lessee to the extent provided in the
Leases as determined by the Majority Registered Owners in the case of
insurance proceeds, in each case, provided no Event of Default has occurred
and is continuing, and forever released from the Trust Estate. If a default
or Event of Default has occurred and is continuing, all such proceeds shall,
at the option of the Majority Registered Owners, be applied to the Notes.
Proceeds of mortgage title insurance shall be held as part of the Trust
Estate.
(b) In the event of a casualty that occurs prior to the final three
(3) years of the term of any Lease, proceeds of any casualty insurance
received on account of such casualty shall be delivered to the Trustee and
deposited by the Trustee into a construction escrow account as directed by
the Majority Registered Owners and provided in Paragraph 14 of each Lease.
Within ten (10) days after the deposit of such casualty insurance proceeds
into the construction escrow account, the Trustee will use the funds in such
account to purchase the Performance Bond which will guarantee completion of
the restoration of the Property within two hundred seventy (270) days after
the casualty, failing which such Performance Bond will pay an amount to the
Trustee which is sufficient to pay the outstanding indebtedness under the
Notes and should any such payment under the Performance Bond be made to the
Trustee, the Majority Registered Owners may direct the Trustee to prepay the
Notes.
ARTICLE 6
Prepayment of Notes
1.33 Generally. No prepayment of Notes may be made except to the
extent and in the manner expressly required by this Indenture or as permitted
pursuant to Section 6.3 (relating to Optional Prepayment). Any prepayment of
Notes pursuant to Article 4 or 5 shall be made in accordance with the
provisions of Section 6.2.
1.34 Notice of Prepayment; Deposit of Money.
(1) In the case of any prepayment of the Notes pursuant to Section
6.3 or Article 4 or 5 hereof, notice thereof shall be sent by the Trustee to
the Registered Owner of each Note at its address appearing on the Register as
soon as practical but in any event at least thirty (30) days prior to the
date fixed for prepayment. Each such notice shall specify date fixed for
prepayment, the principal amount of each Note to be prepaid and the premium,
if any, to be paid and setting forth a pro forma calculation of the Make
Whole Premium. If Base Rent under any Lease will be reduced in connection
with the event giving rise to the prepayment, Owner shall additionally cause
to be delivered to the Trustee and each Registered Owner of a Note a
certificate of Lessee specifying the amount of minimum rent thereafter to
become due under such Lease. On or prior to the date fixed for any prepayment
of the Notes, the moneys required for such prepayment shall be deposited or
caused to be deposited with the Trustee by Owner. Interest on any Note
designated for prepayment shall cease upon the date fixed for prepayment
unless default shall be made in the prepayment thereof to the Trustee, by
11:00 a.m. on such date.
(2) In case of the partial prepayment of Notes pursuant to Article 4
(relating to Possession, Use and Release of the Property) or 5 (relating to
Application of Moneys) hereof, the aggregate outstanding principal amount of
the Notes to be prepaid shall be prorated by the Trustee among the Registered
Owners of Notes in the proportion which the Outstanding Principal Amount of
the Notes held by each such Registered Owner bears to the aggregate
Outstanding Principal Amount of the Notes. Upon any such partial prepayment,
each Installment Payment which shall thereafter be payable on any Note shall
be proportionately reduced, in accordance with actuarial practice as directed
by the Majority Registered Owners, such that upon the due payment of all
remaining Installment Payments there shall have been paid to the Registered
Owner of each such Note the entire unpaid principal amount thereof together
with accrued interest thereon.
(3) On or prior to each date of a partial prepayment of Notes, Owner
shall prepare or procure three copies of a new amortization schedule with
respect to each Note, satisfactory to the Registered Owners of Notes, setting
forth the amount of the interest portion and the principal portion of each
Installment Payment thereafter to be made on such Note and the amount of the
principal of such Note that will remain unpaid after each such Installment
Payment is made. Owner shall retain one of such copies and deliver the
remaining two copies of the Trustee. The Trustee shall retain one of such
copies and deliver the remaining copy to the Registered Owner of the related
Note.
(4) In the case of any prepayment of the Notes pursuant to Section
7.1 hereof, notice thereof shall be mailed by Owner to the Registered Owner
of each Note at its address appearing on the Register as soon as practical
but in any event at least three (3) Business Days prior to the date fixed for
prepayment. Each such notice shall specify the date fixed for prepayment, the
principal amount of each Note to be prepaid, and the accrued and unpaid
interest to be paid and any other amounts due and payable hereunder which
were to be paid. On or prior to the date fixed for any prepayment of the
Notes, the money required for such payment shall be deposited or caused to be
deposited with Trustee by Owner. Interest on any Note designated for
prepayment shall cease upon the date fixed for prepayment unless default
shall be made in the prepayment thereof to Trustee by 11:00 a.m. on such
date.
1.35 Optional Prepayment. Owner may not prepay any portion of the
Notes during the first five (5) years of the term of the Notes. Commencing in
the sixth (6th) year of the term of the Notes, Owner may, at its option,
prepay the Notes, in whole, at any time upon compliance with the provisions
of Section 6.2 at a price equal to the Outstanding Principal Amount of the
Notes plus accrued and unpaid interest thereon to the date fixed for
prepayment plus the Make-Whole Premium.
ARTICLE 7
Events of Default and Remedies
1.36 Events of Default. If one or more of the following Events of
Default shall happen, that is to say:
(1) if default shall be made in payment of the principal, interest,
or premium, if any, on any Note on the date the same becomes due and payable,
either as an Installment Payment, at maturity, as part of any prepayment or
otherwise, including without limitation, the failure to make any payment
pursuant to Section 4.1(a) hereof, as set forth in the Notes and this
Indenture provided any such default shall have continued for five (5) days
after the due date of such Installment Payment;
(2) if any Lease shall be terminated before the expiration of the
term thereof for any reason (other than a termination under Paragraph 29 of
any Lease) or if any Lease shall in any way be amended or modified or shall
be encumbered by or through Owner without the prior written consent of the
Registered Owners of the Notes required to consent thereto pursuant to
Section 3.5 (relating to the Leases; the Assignment) of this Indenture
(except as otherwise expressly provided for herein or therein);
(3) if Owner fails to maintain or to cause to be maintained any
policy of insurance required under this Indenture;
(4) if any representation or warranty of Owner or Lessee set forth
in the Note Agreement, the Leases, this Indenture, the Assignment, the
Subordination Agreement or the Radius Agreement (herein in this Section 7.1
called the Documents) or any notice, certificate, demand or request delivered
to the Trustee or the Registered Owner of any Note pursuant to any of the
Documents shall be false or misleading, as of the time when the same shall
have been made or as to continuing warranties as of any time when the same
shall be in effect, in a way material and adverse to the Trustee or the
Registered Owner of any Note;
(5) if default by Owner shall be made in the due observance or
performance of any covenant or agreement contained in Section 3.5 (relating
to the Documents of Record), Section 3.6(a) (relating to Existence), Section
3.11 (relating to Negative Covenants), Section 3.12 (relating to Base Rent)
or Section 4.3 (relating to Transfer of Owner's Interest in the Property)
hereof or contained in Section 7 of the Note Agreement (relating to
representation and warranties), or if Owner or Lessee shall fail to observe
the provisions of the Assignment;
(6) if default shall be made in the due observance or performance of
any other covenant, condition or agreement of Owner contained herein or in
the Notes which is not the result of an event of default (as defined in the
Leases) under any Lease and any such default shall have continued for thirty
(30) days; provided that if any such default cannot be cured by the payment
of money and cannot with due diligence be cured within such 30-day period and
if the cure of such default shall be promptly commenced and prosecuted with
diligence and Owner shall have notified the Trustee and the Registered Owners
of the Notes thereof, the period within which such default may be cured shall
be extended for such an additional period of time as may be reasonably
necessary to cure such default with diligence and continuity, provided
however, the total period in which such default may be cured is not to exceed
ninety (90) days;
(7) if an event of default by Owner or Lessee under any Lease shall
have occurred and be continuing;
(8) if a receiver, United States Trustee, trustee or liquidator (or
other similar official) of Owner, shall be appointed in any proceeding or by
a federal or state officer or agency and shall not be discharged within
ninety (90) days after such appointment, or if Owner shall consent to such
appointment, or if a custodian for purposes of any federal bankruptcy statute
of substantially all of the assets of Owner is appointed or otherwise takes
possession thereof and shall not be discharged within sixty (60) days, or if
by decree of such court Owner shall be adjudicated bankrupt or be declared
insolvent under any federal or state bankruptcy law or if an order for relief
shall be entered in any bankruptcy proceeding affecting Owner and such decree
or order is not vacated or stayed within ninety (90) days after entry;
(9) if Owner shall file a petition commencing a voluntary case with
respect to Owner under any federal bankruptcy or similar law or shall make a
general assignment for the benefit of its creditors or shall admit in writing
its inability to pay its debts generally as they become due or shall consent
to the appointment of a receiver of the Trust Estate or any part thereof, or
if a petition or an answer proposing the reorganization or liquidation of
Owner, as debtor, pursuant to the Federal Bankruptcy Code or any similar law,
federal or state, shall be filed by Owner, and approved by, any court;
(10) if any of the creditors of Owner shall commence an involuntary
case to reorganize or liquidate Owner pursuant to the Federal Bankruptcy Code
or any similar law, federal or state, and if such petition shall not be
discharged, denied or otherwise disposed of within ninety (90) days after the
date on which such petition was filed; and
(11) if final judgment for the payment of money shall be rendered
against Owner and Owner shall not discharge the same or cause it to be
discharged within sixty (60) days from the entry thereof, or shall not appeal
therefrom or from the order, decree or process upon which or pursuant to
which said judgment was granted, based or entered, and secured a stay of
execution pending such appeal.
Then in every such case, during the continuance of any Event of
Default:
I. The Trustee, upon the request of the Majority Registered Owners,
shall by notice to Owner (except in the case of a sale of the Property by
Owner in violation of any covenant or agreement contained in Section 4.3
relating to Transfer of Owner's Interest in the Property, in which case Owner
hereby expressly waives notice) declare the principal amount of the Notes (if
not then due and payable) and all other amounts then due and payable on the
Notes and under this Indenture to be due and payable immediately, together
with the Make-Whole Premium to the extent permitted by law, and upon any such
declaration the principal of the Notes and all such other amounts shall
become and be immediately due and payable, anything in the Notes or in this
Indenture contained to the contrary notwithstanding, provided, however, that
if such Event of Default shall have occurred under Section 7.1(h), (i) or
(j), or under Section 7.1(g) or is the result of the occurrence of an event
of default under Paragraph 17 of any Lease (relating to Default and Remedies)
then no written notice shall be required but acceleration shall occur
immediately upon such Event of Default.
II. Subject to Lessee's rights under the Leases, the Trustee, or by
its agents or attorneys, may enter into and upon the Property and may exclude
Owner and its respective agents and servants wholly therefrom; and, at the
expense of the Trust Estate, may use, operate, manage and control the same
and conduct the business thereof, may maintain and restore the Trust Estate,
may insure and reinsure the same and may make all necessary or proper
repairs, renewals and replacements and any useful alterations, additions,
betterments and improvements thereto and thereon, all as the Trustee may deem
advisable; and in every case, the Trustee shall have the right to manage and
operate the Trust Estate and to carry on the business thereof and exercise
all rights and powers of Owner with respect thereto either in the name of
Owner or otherwise as directed by the Majority Registered Owners. The Trustee
may, at Owner's expense, obtain a phase I environmental audit report, or the
equivalent, of the Property from a qualified engineer and a phase II or full
environmental audit report for the Property for which a potential violation
of any Environmental Law is disclosed by a phase I audit. If remediation of
any environmental condition of the Property is recommended or required, then
the Owner shall pay the costs of such remediation. The Trustee shall be
entitled to collect and receive all earnings, revenues, rents, issues,
awards, proceeds, profits and income of the Trust Estate and said earnings,
revenues, rents, issues, awards, proceeds, profits and income are hereby
assigned to the Trustee, its successors and assigns, for the benefit of the
Registered Owners of the Notes. After deducting the expenses of conducting
the business thereof and of all maintenance, repairs, renewals, replacements,
alterations, improvements, betterments and additions and taxes, assessments,
environmental audits, insurance and other proper charges upon the Trust
Estate, as well as reimbursement of out-of-pocket expenses reasonably
incurred by the Trustee or by any Registered Owner of the Notes in connection
herewith, reasonable compensation for the services of the Trustee and all
attorneys, servants and agents by the Trustee properly engaged and employed
(including compensation and expenses in connection with any appeal), the
money arising as aforesaid shall be applied as follows:
(1) in case an Event of Default described in clause (a) of this
Section shall not have happened, first to the payment of the Installment
Payments and any other payments of the principal of the Notes and interest
and Make-Whole Premium, if any, thereon, when and as the same shall become
payable, second to the payment of any other sums required to be paid by Owner
under this Indenture, and third, to the payment of the surplus, if any, to
whomsoever shall be entitled thereto; or
(2) in case an Event of Default described in clause (a) of this
Section shall have happened, in the order of priorities set forth in Section
7.2(d) after clause first thereof.
III. The Trustee may institute or cause to be instituted an action
for the foreclosure of this Indenture and the sale of the Property pursuant
to the judgment or decree of a court or courts in the county or counties in
which the Premises subject to the Leases are located. The purchaser at any
sale made under or by virtue of this Indenture or pursuant to any judgment or
decree of court shall take title to the Property or the part thereof so sold
free and discharged of the estate of Owner therein, the purchaser being
hereby discharged from all liability to see to the application of the
purchase money. Any person, including Trustee, may purchase at any such sale.
Trustee is hereby irrevocably appointed the attorney-in-fact of Owner in its
name and stead to make all appropriate transfers and deliveries of the
Property or any portions thereof so sold and, for this purpose, Trustee may
execute all appropriate instruments of transfer, and may substitute one or
more persons with like power, Owner hereby ratifying and confirming all that
its said attorneys or such substitute or substitutes shall lawfully do by
virtue hereof. Nevertheless, Owner shall ratify and confirm, or cause to be
ratified and confirmed, any such sale or sales by executing and delivering,
or by causing to be executed and delivered, to Trustee or to such purchaser
or purchasers all such instruments as may be advisable, in the judgment of
Trustee, for the purpose, and as may be designated, in such request. Any sale
or sales made under or by virtue of this Indenture, to the extent not
prohibited by law, shall operate to divest all the estate, right, title,
interest, property, claim and demand whatsoever, whether at law or in equity,
of Owner in, to and under the Property, or any portions thereof so sold, and
shall be a perpetual bar both at law and in equity against Owner, its
successors and assigns, and against any all persons claiming or who may claim
the same, or any part thereof, by, through or under Owner, or its successors
or assigns. The powers and agency herein granted are coupled with an interest
and are irrevocable. In the event of a foreclosure sale pursuant to this
Indenture or other transfer of title or assignment of the Property in
extinguishment, in whole or in part, of the Lien of this Indenture, all
right, title and interest of Owner in and to all policies of insurance
required under the provisions of Section 3.9 of this Indenture shall inure to
the benefit of and pass to the successor in interest of Owner or the
purchaser or grantee of the Property or any part thereof so transferred.
IV. The Trustee, with or without entry, personally or by their
co-trustee, agents or attorneys, may (after notice to Owner) sell the Trust
Estate and all estate, right, title, interest, claim and demand therein and
in bar of the right of redemption (statutory or otherwise) at one or more
private (if and to the extent permitted by applicable law) or public sales,
as an entirety or in parcels and at such times and places and upon such terms
as may be specified in the notice or notices of sale to be given to Owner or
as may be required by applicable law. Any number of sales may be conducted
from time to time. The power of sale shall not be exhausted by any one or
more such sale as to any part of the Trust Estate remaining unsold, but shall
continue unimpaired until all of the Trust Estate shall have been sold or the
Notes and all indebtedness of Owner secured hereby shall have been paid. In
addition, as to the Property, the Trustee will have the statutory power of
sale, if any, as may be provided by the law of the state in which such
Property is located. As to the Property this Indenture is made upon the
statutory conditions provided for by the laws of the state in which such
Property is located.
V. The Trustee may take all steps to protect and enforce its rights
and remedies provided hereby or by applicable law, whether by action, suit or
proceeding in equity or at law (for the complete or partial foreclosure
hereof or in aid of the execution of any power herein granted or for the
enforcement of any other appropriate legal or equitable remedy) or otherwise
as the Trustee shall deem most effectual to protect and enforce the same and
Owner hereby assents to a decree in any such proceeding.
VI. The Trustee will have all rights and remedies provided to a
secured party by the Uniform Commercial Code with respect to such portion of
the Trust Estate, if any, as is governed by the Uniform Commercial Code, and
this instrument shall constitute a security agreement under the Uniform
Commercial Code.
VII. The Trustee shall be and hereby is appointed the agent and
attorney-in-fact of Owner to exercise any and all rights that Owner is
permitted to exercise under any contract, agreement or other instrument which
is part of the Trust Estate including, but not limited to, the Leases.
VIII. The Trustee may apply all funds held in the Reserve Account to
any and all sums due hereunder.
1.37 Sale of Property; Application of Proceeds.
(1) In connection with any sale under this Article 7, the Trustee
may postpone the sale of the Trust Estate by public announcement at the time
and place of such sale, and from time to time thereafter may further postpone
such sale by public announcement made at the time of sale fixed by the
preceding postponement.
(2) Upon the completion of any sale made by the Trustee under or by
virtue of this Article, the Trustee shall execute and deliver to the
purchaser a good and sufficient deed and other instruments conveying,
assigning and transferring all its estate, right, title and interest in and
to the property and rights so sold. The Trustee is hereby irrevocably
appointed the true and lawful attorney of Owner and any subsequent owner of
the Trust Estate to make, in its own name and stead or in the name of Owner,
all necessary conveyances, assignments, transfers and deliveries of the
property and rights so sold, and for that purpose the Trustee may execute all
necessary deeds and instruments of assignment and transfer and may substitute
persons with like power, Owner or any subsequent owner of the Trust Estate
hereby ratifying and confirming all that their said attorney or substitutes
shall lawfully do by virtue hereof. Nevertheless, Owner or any subsequent
owner of the Trust Estate, if so requested in writing by either Trustee,
shall ratify and confirm any such sale by executing and delivering to the
Trustee or to such purchasers any instrument which, in the reasonable
judgment of the Trustee, is suitable or appropriate therefore. Any such sale
made under or by virtue of this Article whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Owner in and to the property and rights so sold, and shall be a
perpetual bar at law and in equity against Owner and its successors and
assigns and any and all Persons who claim or may claim the same from, through
or under Owner or its successors or assigns.
(3) The receipt by the Trustee for the purchase money paid as a
result of any such sale shall be a sufficient discharge therefor to any
purchaser of the Trust Estate sold as aforesaid; and no such purchaser or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money upon or for any purpose hereof, shall be answerable in any
manner whatsoever for any loss, misapplication or non-application of any of
such purchase money or shall be bound to inquire as to the authorization,
necessity, expediency or regularity of any such sale.
(4) In the event of any sale made under or by virtue of this Article
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale), the
entire principal of and interest and Make-Whole Premium, if any, on the Notes
and all other sums required to be paid by Owner pursuant hereto, if not
previously due and payable, shall immediately become due and payable,
anything in the Notes or in this Indenture to the contrary notwithstanding.
The purchase money or proceeds of any sale made under or by virtue of this
Article, together with any other sums which then may be held by the Trustee
as part of the Trust Estate or the proceeds thereof, shall, unless otherwise
required by applicable law, be applied: first, to the payment of the costs
and expenses of such sale, including any amounts then owed to the Trustee
pursuant to this Indenture and of any judicial proceeding wherein the same
may be made, second, to the payment of the whole amount then owing on the
Notes for the payment of accrued and unpaid interest and Make-Whole Premium,
if any; third, to the payment of the whole amount then owing on the Notes for
the payment of the principal; fourth, to the payment of any other sums
secured by this Indenture; and fifth, to the payment of the surplus, if any,
to Owner or whosoever shall be lawfully entitled thereto. Such application of
proceeds pursuant to clauses second and third shall be pro-rated among the
outstanding Notes without preference or priority.
1.38 Purchase by Trustee. Upon any sale made under or by virtue of
this Article (whether made under any power of sale herein granted or under or
by virtue of any judicial proceedings or of a judgment or decree of
foreclosure and sale), the Trustee, on behalf of the Registered Owners of
Notes may bid for and acquire the Trust Estate or any part thereof and in
lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the indebtedness of Owner secured by this Indenture the net
proceeds of sale after deduction of all costs, expenses, and other amounts to
be paid therefrom as herein provided. The Person making such sale shall
accept such settlement without requiring the production of the Notes, and
without such production there shall be deemed credited thereon the net
proceeds of sale ascertained and established as aforesaid. The Trustee upon
so acquiring the Trust Estate or any part thereof, shall be entitled to hold,
deal with and sell the same in any manner permitted by applicable laws.
1.39 Receivers. During the continuance of any Event of Default
hereunder, immediately upon the commencement of any legal proceeding by the
Trustee, for or in aid of the enforcement of the Notes or of this Indenture,
and without regard to the adequacy of the security of the Trust Estate, the
Trustee shall be entitled to the appointment of a receiver or receivers of
the Trust Estate and of all the earnings, revenues, rents, issues, profits
and income thereof, and Owner hereby consents to any such appointment.
1.40 Remedies Cumulative. No remedy herein shall be exclusive of any
other remedy or remedies, and each such remedy shall be cumulative and in
addition to every other remedy given hereunder, under the Assignment or under
any other applicable document or now or hereafter existing at law or in
equity; and every power and remedy of the Trustee hereunder, under the
Assignment or under any other applicable document may be exercised from time
to time and as often as may be deemed expedient by the Trustee. No delay or
omission of the Trustee to exercise any right or power accruing upon an Event
of Default shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein.
1.41 Cross-Default and Cross-Collateralization of Notes. Borrower
hereby acknowledges and agrees that the obligations under the Leases are
cross-defaulted such that a failure of payment under any Lease will cause a
default to occur under the Notes. Borrower hereby further acknowledges and
agrees that the mortgages, assignments and security interests granted herein
and in the other Operative Documents (as defined in the Note Agreement) with
respect to each Property and Lease as collateral for the Notes are
cross-collateralized with every other Property and Lease such that upon any
default by Owner under any Operative Document or upon a default by Lessee
under any Lease, the entire principal amount of the Notes and all other
amounts then due and payable on the Notes and under this Indenture may, at
the option of the Majority Registered Owners, be declared to be due and
payable immediately, together with the Make-Whole Premium.
1.42 Waiver of Rights. To the extent not prohibited by applicable
law, Owner agrees that it will not at any time or in any manner whatever
claim or take any benefit of any stay, extension or moratorium law which may
affect the terms of this Indenture, the Assignment or any other applicable
document; nor claim or take any benefit of any law providing for the
valuation or appraisal of the Trust Estate or any part thereof prior to any
sale thereof; nor, prior to or after any such sale, claim or exercise any
right to redeem the property so sold or to be sold or any part thereof or
equity of redemption in connection therewith; and Owner hereby expressly
waives all benefit or advantage of any such law and covenants not to hinder,
delay or impede the execution by either Trustee of any power or remedy
granted in this Indenture, in the Assignment, in any other applicable
document or available at law or in equity, but to suffer and permit the
execution of every power and remedy as though no such law existed. To the
extent not prohibited by applicable law, Owner waives all right to have the
Trust Estate marshaled upon any foreclosure hereof.
1.43 Waiver of Remedies. Subject to Article 9, the Trustee, upon the
written request of the Registered Owners of not less than 66_% in Outstanding
Principal Amount of the Notes, shall waive any default hereunder and its
consequences. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
1.44 Suits by Trustee. All rights of action under this Indenture,
under the Assignment or under any of the Notes may be enforced by the Trustee
without the possession of any of the Notes and without the production thereof
at any trial or other proceeding relative thereto. Any such suit or
proceeding instituted by the Trustee shall be brought in their names as
Trustee, and any recovery of judgment shall be for the ratable benefit of the
Registered Owners of the Notes then outstanding.
1.45 Direction of Remedies. The Majority Registered Owners shall
have the right by an instrument in writing delivered to the Trustee to direct
the time, method and place of conducting any proceeding with respect to this
Indenture, the Assignment or any other applicable document and the right of
exercising any power or trust conferred upon the Trustee hereunder, subject
to the provisions of Section 8.1; provided, however, that for five (5)
Business Days the Trustee shall have the right to decline to follow any such
direction if the Trustee shall determine that the proceeding so directed
would involve it in personal liability unless provided with an indemnity
against such liability pursuant to Section 8.1. If the Trustee determines
that it will not proceed without an indemnity, it shall so notify the
Registered Owners within two (2) Business Days of its decision. If no such
instrument has been received from the Registered Owners of the Notes, the
Trustee may take such action, if any, as the Trustee shall determine after
ten (10) days' notice to the Registered Owners of the outstanding Notes
specifying the proposed action by the Trustee.
1.46 Suits by Registered Owners. In case an Event of Default shall
have happened and be continuing, and the Majority Registered Owners shall
have requested the Trustee to take action with respect thereto, and the
Trustee shall have failed for fifteen (15) days to comply with such request,
then any Registered Owner of any Note shall have the right to institute
proceedings against Owner for the collection of the sums then due and unpaid,
subject in all instances to the same restrictions as would have been
applicable to the Trustee if the Trustee had taken or attempted to take the
requested action.
1.47 Expenses and Services After an Event of Default. When the
Trustee incurs expenses or render services after the occurrence of an Event
of Default described in Section 7.1(h), (i) or (j), the expenses and
compensation for services are intended to constitute expenses of
administration under any bankruptcy law.
ARTICLE 8
The Trustee
1.48 Right and Obligations of Trustee.
(1) The Trustee accepts the trust hereby created and agrees to
perform the duties herein required of it upon the terms and conditions
hereof. The Trustee shall perform only ministerial acts unless the Trustee
receives written instructions by the Majority Registered Owners. The Trustee
shall do all things consistent with and subject to such written instructions
in order to enforce the provisions of this Indenture or to take any action
with respect to an Event of Default, or to institute, appear in or defend any
suit or other proceeding with respect thereto, or to protect the interests of
the Registered Owners of the outstanding Notes. If no Event of Default shall
be continuing, the Trustee shall be responsible for the performance of only
such duties as are specifically set forth in this Indenture or any agreement
or other instrument referred to herein and no implied obligations shall be
read into this Indenture or such agreement or other instrument against the
Trustee, and the Trustee shall not be answerable or accountable except for
its own bad faith, wilful misconduct or negligence and, subject to Section
10.1, Owner agrees to indemnify, defend and save harmless the Trustee against
and from any liability and damages which Trustee may incur or sustain, in
good faith and without gross negligence in the exercise and performance of
any of Trustee's powers and duties hereunder; nor shall the Trustee be
accountable for the use of any proceeds from the sale of the Notes. Except as
otherwise expressly set forth in Section 8.1(1) of this Indenture, the
Trustee shall be under no obligation to take any action to protect, preserve
or enforce any rights or interests in the Trust Estate which, in the
Trustee's judgment, shall be likely to involve unusual expense or personal
liability, unless one or more of the Registered Owners shall furnish to the
Trustee reasonable indemnity against liability and expense (which in the case
of any Institutional Investor shall mean the written agreement of such
Institutional Investor to indemnify the Trustee against any such liability
and expense). If the Trustee determines that it will not proceed without an
indemnity within two (2) Business Days, it shall so notify the Registered
Owners of its decision. The Trustee in its individual or any capacity, may
become the payee, Registered Owner or pledgee of Notes, with the same rights
which it would have if it were not the Trustee hereunder, subject to its
fiduciary duties hereunder.
(2) The Trustee shall receive its established and customary default
administration compensation during the continuance of an Event of Default.
(3) For the compensation and reimbursement of expenses referred to
in Sections 3.15, 8.1(b) and 8.1(d) and the indemnity referred to in Section
8.1(a), the Trustee shall be secured hereunder prior to the Notes.
(4) The Trustee shall incur no liability in acting upon any
signature, notice, request, consent, certificate, opinion or other instrument
reasonably believed by the Trustee to be genuine. In administering the
trusts, the Trustee may act directly or through their agents or attorneys and
may, at the expense of Owner during the continuance of an Event of Default,
consult with counsel, accountants and other skilled persons to be selected
and employed by them, and the reasonable expenses thereof shall be paid by
Owner (but only if such expenses are incurred during the continuance of an
Event of Default) and the Trustee shall not be liable for anything done,
suffered or omitted in good faith by the Trustee in accordance with the
opinion of any such person who the Trustee has selected with reasonable care.
(5) The Trustee shall not be held responsible for the legality or
validity hereof or of the Notes. In executing this Indenture, the Trustee
makes no covenant or representation as to the rights of the Registered Owners
of the Notes, or the title of Owner to, or the condition of, the Trust Estate
or the sufficiency of the security for the Notes afforded thereby.
(6) Whenever in administering the trusts, the Trustee shall deem it
necessary or desirable that a matter be established prior to taking,
suffering or omitting any action hereunder, such matter (unless other
evidence in respect thereof is herein specifically prescribed) may be deemed
to be conclusively established by an instrument purporting to be signed by
Owner's manager or its officers, as applicable, and delivered to the Trustee,
and unless the Trustee has actual knowledge (as such term is defined in
subparagraph (n) of this Section 8.1) to the contrary, such instrument shall
be full warrant to the Trustee for any action taken, suffered or omitted by
them in reliance thereon.
(7) Subject to Section 8.1(l) and Section 8.1(p), the Trustee shall
have no duty to see to any recording or filing or registration of this
Indenture, any instrument of further assurance, any financing statement or
amendments or supplements to any of said documents, or to see to the payment
of any fees, charges or taxes in connection therewith, or to give any notice
thereof, or to effect or renew any insurance or see to the collection or
application of any insurance moneys or condemnation awards, or to ascertain
whether the property of Owner is adequately or properly insured, or to see to
the payment of any tax, assessment or other governmental charge which may be
levied or assessed on the Trust Estate or against Owner.
(8) The Trustee shall have no duty to calculate the Make-Whole
Premium or to verify any amortization schedules or any financial or other
statements or reports or certificates furnished pursuant to any provision
hereof, and they shall be under no other duty in respect of the same, except
to retain the same in their files, and permit the inspection thereof at
reasonable times by the Registered Owners of any Notes and to the extent
provided in Section 8.10 hereof. The Trustee shall seek the direction of the
Majority Registered Owners as to the calculation of the Make-Whole Premium.
(9) Except as set forth in Section 2.3, the Trustee shall not be
concerned with, accountable to or liable to any person for the use or
application of any deposited moneys which shall be released or withdrawn in
accordance with the provisions hereof.
(10) In accepting the Trust Estate, the Trustee acts solely as
trustee hereunder and not in its individual capacity, and all persons, other
than Owner and the Registered Owners of the Notes, having any claim against
the Trustee hereunder (other than for the Trustee's own bad faith, wilful
misconduct or negligence) shall look only to the Trustee's rights in and to
the Trust Estate for payment or satisfaction thereof.
(11) Except as otherwise expressly provided, the Trustee shall not
be required to inquire as to the performance or observance of any of the
covenants or agreements herein or in any other instruments to be performed or
observed by Owner. The Trustee shall not be deemed to have notice or
knowledge of any default or Event of Default (except default in the payment
of moneys to the Trustee which are required to be paid to the Trustee on or
before a specific date or within a specified time after receipt by the
Trustee of a notice or certificate which was in fact received and except
default in the delivery of any certificate, opinion or other document
expressly required to be delivered to the Trustee by any provision hereof),
unless the Trustee or any officer of the Trustee shall have actual knowledge
that a default or an Event of Default has occurred or unless the Trustee or
any officer of the Trustee shall receive from Owner, Lessee or the Registered
Owner of a Note written notice stating that a default or an Event of Default
has occurred and specifying the same, and in the absence of such notice, the
Trustee may assume that there is no such default or Event of Default, except
as aforesaid. Promptly after obtaining such actual knowledge or notice
(including, without limitation, with respect to any of the matters set forth
in the parenthetical clause above in this Section 8.1(k)), the Trustee shall
send notice to each Registered Owner of an outstanding Note and the Owner
specifying such default or Event of Default, specifying what actions, if any,
the Trustee is taking or has taken with respect thereto and/or requesting
instruction from such Registered Owners with respect thereto. In the case of
any default in the payment of moneys to the Trustee which are required to be
paid to the Trustee on or before a specified date, the Trustee shall, within
one Business Day after such default, provide notice thereof (i) to Owner,
(ii) to Lessee, and (iii) to each Registered Owner of an outstanding Note.
Such notice(s) to Owner and, if applicable, Lessee shall include demand for
interest on such late payment at the Overdue Rate. Promptly, and in the case
of default in the payment of money within one Business Day, after obtaining
actual knowledge or notice (including, without limitation, with respect to
any of the matters set forth in the first parenthetical clause above in this
Section 8.1(k)) of an Event of Default described in Section 7.1(g), or an
Event of Default which has resulted from an Event of Default described in
Section 7.1(g), the Trustee shall notify Owner of such Event of Default or
default.
(12) If Owner fails to timely file, or cause the timely filing of,
all appropriate Uniform Commercial Code continuation statements with respect
to the Trust Estate at least thirty (30) days prior to the last day on which
such statements may be filed in order to comply with Section 3.3 hereof, the
Trustee shall notify each Registered Owner of the Notes that such
continuation statements have not been filed and will execute and file such
continuation statements. The Trustee shall be required only to monitor
Owner's filing of continuation statements relating to original financing
statements for which the Trustee has been provided acknowledgment copies, or
with respect to which the Trustee has been notified of a change of address of
the debtor. The Trustee shall monitor the insurance required under Section
3.9 hereof including receipt of certificates of insurance required to be
furnished by paragraph (c) thereof and notices of cancellation, modification,
termination or lapse of coverage. In the event Trustee does not timely
receive any required certificate or receives any such notice, it shall
immediately notify each Registered Owner thereof.
(13) The Trustee represents and warrants that it is duly authorized
under applicable law, its articles of organization and its by-laws to
authenticate the Notes, and to execute and deliver this Indenture; all
corporate action, necessary or required therefor has been duly and
effectively taken or obtained. The Indenture is a legal, valid and binding
obligation of the Trustee enforceable in accordance with its terms, subject
to bankruptcy, insolvency and equitable remedies provided by law..
(14) The Trustee shall be deemed to have "actual knowledge" within
the terms of this Section 8.1 at such time as a responsible officer or
responsible employee of the Corporate Trust Department in his or her capacity
as such has such actual knowledge.
(o) Except as set forth in Section 2.3 of this Indenture none of the
provisions of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any personal financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if the Trustee shall reasonably believe that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(p) The Trustee shall prepare and execute continuation statements in
accordance with subsection (l) of this Section 8.1 as required by the local
law of each state in which a Property is located to continue the
effectiveness of the financing statements filed pursuant to this Indenture.
The Trustee shall be required only to prepare and execute continuation
statements relating to original financing statements for which the Trustee
has been provided acknowledgment copies, or with respect to which the Trustee
has been notified of a change of address of the debtor.
(q) The Trustee shall provide notice to the Registered Owners, Owner
and Lessee of any non-payment of Base Rent on the sixth day of any month in
which the Trustee has not received payment by Lessee of Base Rent under any
Lease on or before the fifth day of such month.
(r) The Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolutions, officer's certificate,
certificate of auditors, or any other certificate, statement, instrument,
opinion, report, notice, request, direction, consent or other paper or
document believed by the Trustee to be genuine and to have been signed or
presented by the property party or parties.
(s) The Trustee may consult with counsel of its choice (which may be
counsel for the Owner) and the written advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance therewith.
(t) Prior to the occurrence of an Event of Default hereunder, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice request, direction, consent or other paper or
documents, unless requested in writing so to do by the Majority Registered
Owners.
(u) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
(v) Except as otherwise provided herein, the Trustee shall not be
required to ascertain or inquire as to the performance or observance of any
of the covenants or agreements contained herein or in any other instruments
delivered to the Trustee hereunder, to be performed or observed by the Owner
or any party to any such other instruments, or to take notice or be deemed to
have notice or knowledge of a default, except default in the payment of
moneys to the Trustee which the Owner is required to pay, or cause to be
paid, to the Trustee on or before a specified date or within a specified
time, unless the Trustee shall have received from the Owner or any of the
Registered Owners notice that a default has occurred and specifying the same,
in which event the Trustee shall promptly notify the Owner and each of the
Registered Owners thereof. Except as aforesaid, in the absence of notice from
the Owner or any of the Registered Owners or actual knowledge of such default
or Event of Default, the Trustee may assume that no default or Event of
Default exists under the Indenture.
(w) The recitals contained herein and in the other documents shall
be taken as the statements of the Owner, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of the documents and shall
not be accountable for the use or application by the Owner of the proceeds of
the Notes, or for the use or application of any moneys paid over by the
Trustee in accordance with any provision of this Indenture.
1.49 Annual Certificate and Statement of Accounts. Within thirty
(30) days after the end of each calendar year, the Trustee shall submit to
the Registered Owners of the Notes a certificate which summarizes the
activities in the accounts where such amounts received by the Trustee as
contemplated under Section 5 (related to Application of Moneys) have been
deposited for such calendar year, including a statement of any interest
earned on any amounts held therein.
1.50 Resignation and Removal of Trustee. The Trustee may resign and
be discharged of the trusts by giving written notice to each Registered Owner
of a Note at its address appearing on the Register, to Owner and Lessee, of
such resignation, specifying the date (which shall be not less than 90 days
after the date of mailing such notice) when such resignation shall take
effect. Such resignation shall take effect on the date so specified unless
previously a successor trustee shall not have been appointed as provided in
Section 8.3, in which event such resignation shall take effect immediately
upon the appointment of such successor. The Trustee may be removed with or
without cause at any time by a written instrument signed by the Majority
Registered Owners.
1.51 Successor Trustee.
(1) If, at any time, the Trustee shall have given notice of its
intention to resign, shall resign or be removed or if the Trustee shall be
taken under the control of any public officer or a receiver appointed by a
court, then (except as hereinafter provided) a successor may be appointed by
the Majority Registered Owners in either case by an instrument signed by such
Registered Owners; provided, that if the Majority Registered Owners shall not
have appointed such successor prior to the effective date of such
resignation, removal or taking under control, then the retiring trustee or
the Registered Owner of any outstanding Note may apply to a court of
competent jurisdiction to appoint a successor to act until a successor
trustee shall be appointed by the Majority Registered Owners. After any such
appointment by such court, the retiring Trustee or such Registered Owner of
the Notes, as the case may be, shall mail written notice thereof to the
Registered Owners of the Notes at their respective addresses appearing on the
Register; but any successor trustee so appointed by such court shall
immediately and without further act be superseded by a successor trustee
appointed by the Majority Registered Owners.
(2) Any successor to the Trustee shall execute and deliver to its
predecessor and Owner, an instrument accepting such appointment, and
thereupon such successor, without any further act shall become vested with
all the Property, rights, duties and Trustee of its predecessor hereunder
with like effect as if originally named as Trustee herein; however, on the
written request of Owner or the successor trustee, such predecessor shall
execute and deliver an instrument transferring to such successor, upon the
trusts expressed in this Indenture, such Property, rights and trusts, and
shall assign, transfer, deliver and pay over to such successor, the Property
and moneys subject to the lien hereof and held by such predecessor. Such
successor Trustee shall give notice of acceptance of such appointment to
Lessee and each Registered Owner of Notes. Should any deed or conveyance from
Owner be required by such successor for vesting in and confirming to such
successor such Property, rights and trusts, then on request all such deeds,
conveyances and instruments shall be executed, acknowledged and delivered by
Owner.
(3) Any successor to the Trustee, however appointed, shall always be
a bank or trust company, organized under the laws of the United States or any
of the States thereof, having a combined capital, surplus and undivided
profits (as shown by its most recent financial statement distributed to its
shareholders) aggregating at least $250,000,000, if there shall be such a
bank or trust company willing and legally qualified to accept and perform the
trusts and duties mentioned herein upon reasonable or customary terms.
(4) Any corporation into which the Trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which it shall be a party, shall be the successor to the
Trustee without the execution of any paper provided it meets the criteria set
forth in clause (c) above.
1.52 Liability of Trustee. No trustee hereunder shall be personally
liable by reason of any act or omission of any successor trustee hereunder.
1.53 Segregation of Moneys. All moneys received by any trustee
hereunder shall be immediately paid over to the Trustee pursuant to this
Indenture and shall be held in trust by the Trustee for the purposes for
which such moneys were paid, and shall be segregated from any other moneys
held by the Trustee, and such money shall be deposited by the Trustee into a
segregated trust account maintained in the name of the Trustee, and the
Trustee shall not be liable for any interest thereon, except as expressly
provided in Section 2.3.
1.54 Illegal Acts. No provision of this Indenture or any amendment
or supplement hereto shall be deemed to impose any duty or obligation on the
Trustee to perform any act in the execution of the trust or to exercise any
right, power, duty or obligation conferred or imposed on them, which under
any present or future law shall be unlawful, or which shall be beyond the
corporate powers, authorization or qualification of the Trustee (any such act
and any such exercise shall be performed and exercised by any separate
trustee or co-trustee appointed as provided in Section 8.9, provided, that
the same shall not be unlawful or beyond his or its powers, authorization and
qualifications).
1.55 Communications to be Sent to Registered Owners and to Owner.
Promptly upon the sending or receipt thereof or the execution of any
supplement pursuant to Article 9, the Trustee shall send a copy of each
supplement, notice, certificate, request, demand, financial statement,
amortization schedule and any other written communication sent by it or
received by it pursuant to or in connection with this Indenture and the Trust
Estate, or any portion thereof, to each Registered Owner of an outstanding
Note and to Owner. Without limiting the foregoing, promptly upon the taking
of any action by the Trustee pursuant to Section 3.10 or Article 7 of this
Indenture, the Trustee shall send written notice together with a description
thereof to each Registered Owner of an outstanding Note and to Owner.
1.56 Co-Trustee
(a) At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Estate may at the
time be located, the Trustee shall have power to appoint and, upon the
written request of the Trustee or of the Majority Registered Owners, Owner
shall for such purpose join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint
one or more persons approved by the Trustee either to act as co-trustee,
jointly with the Trustee, of all or any part of the Trust Estate, or to act
as separate trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such person
or persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this
Section.
(b) Should any written instrument from Owner be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and
all such instruments shall, on request, be executed, acknowledged and
delivered by Owner.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the
following terms, namely:
(i) The Notes shall be authenticated and delivered, and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder,
shall be exercised solely by the Trustee.
(ii) The rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Trustee or by the Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent
or unqualified to perform such act, in which event such rights,
power, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(iii) The Trustee at any time, by an instrument in writing
executed by it, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section. Upon
the written request of the Trustee, Owner shall join with the
Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or trustee so
resigned or removed may be appointed in the manner provided in this
Section.
(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee,
or any other such trustee hereunder.
ARTICLE 9
Supplements
1.57 Supplements Without Consent. Except as otherwise expressly
provided in this Indenture, without the consent of the Registered Owners of
the Notes, Owner and the Trustee may enter into supplements to this Indenture
and may enter into amendments of the Leases for any one or more of the
following purposes:
(1) to correct or amplify the description of any property subject to
the lien hereof or subject to any Lease; and
(2) to Grant to the Trustee any additional property.
Prior to entering into such supplemental indenture, the Trustee may
require delivery by Owner of an officer's certificate and an opinion of
counsel independent of Owner and Lessee confirming Trustee's authority to
enter into such supplemental indenture.
1.58 Supplements with Consent. With the written consent of the
Majority Registered Owners, Owner and the Trustee may enter into supplements
changing in any manner or eliminating any of the provisions of this
Indenture, as amended and supplemented, or amending the Leases; provided,
that without the consent of the Registered Owner of each Note no such
supplement shall (a) impair or affect the right of each Registered Owner to
receive payments or prepayments of the principal of and payments of the
interest and premium (if any) on its Note, as therein and herein provided,
including, without limitation, the date upon which such payment or
prepayments are due and payable pursuant to the terms and conditions of the
Notes and this Indenture, (b) except as otherwise expressly provided in this
Indenture, deprive the Registered Owner of any Note of a lien on the Trust
Estate or adversely affect its lien on the Trust Estate, or (c) change the
percentage of principal amount required by clause I of Section 7.1 (relating
to Events of Default), Section 7.8 (relating to Waiver of Remedies), Section
7.10 (relating to Direction of Remedies), or Section 7.11 (relating to Suits
by Registered Owners) or this Section 9.2. Upon the filing with the Trustee
of the appropriate consents of the Registered Owners of the Notes, the
Trustee shall join with Owner in the execution of such supplement or
amendment unless such supplement or amendment affects the Trustee' rights,
duties or immunities hereunder, in which case the Trustee may, but shall not
be obliged to, enter into such supplement or amendment. In connection with
any such supplement and at Owner's expense, the Trustee shall receive an
opinion of counsel satisfactory to the Trustee and the Majority Registered
Owners as to the validity and enforceability of such supplement.
1.59 Delivery of Supplements. Owner shall provide the Trustee and
each Registered Owner of the Notes, at its expense or the expense of Lessee,
with a proposed form of any supplement hereto or amendment of any Lease not
less than ten (10) days prior to the execution and delivery thereof. Promptly
after the execution of any supplement hereto or amendment of any Lease,
Trustee shall mail by written notice a conformed copy of such supplement or
amendment to each Registered Owner of a Note at the address of such
Registered Owner appearing on the Register. Any failure of Trustee to give
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of such supplement.
ARTICLE 10
Miscellaneous
1.60 Immunity from Liability. (a) No recourse shall be had for the
payment of any amounts due under the Notes, this Indenture, the Assignment or
any other documents executed by Owner in connection with the transactions
contemplated hereby, including without limitation, the principal, interest or
premium, if any, on the Notes, or for any claim based thereon or otherwise in
respect thereof or based on or in respect of this Indenture or the Assignment
against (i) Owner, or any members or managers of the Owner. It is understood
that the Notes and all obligations under or with respect to this Indenture
may not be enforced against any person or entity described above or any
assets of any of them; provided, that the foregoing provisions of this
paragraph shall not (x) prevent recourse to the Trust Estate or the sums due
or to become due under any instrument which is part of the Trust Estate
including, without limitation, the right to proceed against Lessee under any
Lease or (y) constitute a waiver, release or discharge of any indebtedness or
obligation evidenced by the Note, or secured by this Indenture, but the same
shall continue until paid or discharged, and provided, further, that the
foregoing provisions of this paragraph shall not limit the right of any
person to name Owner or any transferee of any interest in the Trust Estate as
a party defendant in any action or suit for a judicial foreclosure of or in
the exercise of any other remedy under the Notes, the Assignment or under
this Indenture, provided no deficiency judgment shall be sought and no
judgment against officers, directors, shareholders, partners, members,
trustees or beneficiaries of Owner in their individual capacity shall be
sought or enforced.
(b) Notwithstanding the foregoing immunity from liability provision
contained in paragraph (a) of this Section 10.1, it is expressly understood
and agreed that Owner and Owner's members shall be personally liable for the
due, punctual and full payment and performance of and covenants to duly,
punctually and fully pay and perform, any deficiency, loss or damage,
including reasonable attorneys' fees and court costs, suffered by the
Trustee, the Note Purchaser or any Registered Owner of the Notes resulting
from the following:
(i) the application of rents, security deposits, or other
income, issues, profits, and revenues derived from the
Property in a manner other than as provided for in this
Indenture; or
(ii) any loss, cost or damages arising out of or in connection
with fraud or material misrepresentations to the Trustee,
the Note Purchaser or any Registered Owner of the Notes by
Owner (or by any of its managers, officers, members, or
their agents, if applicable); or
(iii) any loss, cost or damages arising out of or in connection
with Owner's use or misapplication of (a) any proceeds paid
under any insurance policies by reason of damage, loss or
destruction to any portion of the Property, or (b) proceeds
or awards resulting from the condemnation or other taking
in lieu of condemnation of any portion of the Property, for
purposes other than those set forth in the Indenture; or
(iv) any loss, cost or damages arising out of or in connection
with any material waste of the Property or any portion
thereof and all reasonable costs incurred by the Trustee,
the Note Purchaser or any Registered Owner of the Notes in
order to protect the Property; or
(v) a transfer or encumbrance by Owner of interest in the
Property not permitted by the Indenture or which is
unapproved by the Trustee and the Majority Registered
Owners; or
(vi) any loss, costs or damages arising out of or in connection
with the covenants, obligations, and liabilities under the
environmental indemnity set forth in paragraph 3.16 hereof;
or
(vii) all out of pocket costs and fees, including, without
limitation, attorneys' fees, incurred by the Trustee or
Payee in the enforcement of subparagraphs 10.1(b)(i)
through 10.1(b)(vii); or
(viii) any loss, costs or damages arising out of or in connection
with the failure of Owner or Owner's members to perform
their obligations under the Radius Agreement.
10.2 Unclaimed Funds. At the expiration of six years following the
date when all of the Notes issued hereunder shall have become due and payable
(whether by lapse of time or by acceleration or by the exercise of the
privilege of prepayment), the trust established hereby on moneys deposited
for payment of the Notes shall automatically terminate and any moneys
deposited for such purposes then remaining on deposit with the Trustee shall
be paid to Owner upon written request of Owner for the payment thereof and
the person entitled to receive such moneys shall thereafter look only to
Owner; provided, that the Trustee before being required to make any such
repayment shall, at the expense of Owner, cause to be published at least once
but not more than three times in a daily newspaper of general circulation in
Detroit, Michigan, a notice to the effect that said moneys have not been
applied for the purpose for which they were deposited, that said trust has
terminated, and that after a date named therein, which shall not be less than
ten (10) days after the date of first publication of said notice, any
unclaimed balance of said moneys then remaining in the hands of the Trustee
will be paid to Owner.
10.3 Security Agreement and Financing Statement. From the date of
its recording, this Indenture shall be effective as a security agreement and
financing statement by and between Owner, as debtor, and the Trustee, as
secured party, filed as a security agreement and financing statement pursuant
to the Uniform Commercial Code in each state in which the Property is located
with respect to all goods constituting part of the Trust Estate which are or
are to become fixtures related to the real estate described herein. For this
purpose, the address of the debtor is the address of Owner set forth above,
and the address of the secured party is the address of the Trustee set forth
above. This Indenture covers goods which are or are to become fixtures.
Owner hereby grants the Trustee a security interest in such portions
of the Trust Estate which may be subject to a security interest under Article
9 of the Uniform Commercial Code, as enacted in the state in which such
portion of the Trust Estate is located, and in all additions thereto,
substitutions therefor and proceeds thereof, for the purpose of securing all
indebtedness now or hereafter secured by this Indenture. Owner agrees to
execute and deliver financing and continuation statements covering such
Property from time to time and in such form as the Majority Registered Owners
may require to perfect and continue the perfection of Trustee's lien or
security interest with respect to such portion of the Trust Estate. Upon the
occurrence of any Event of Default hereunder, subject to Section 10.1 hereof,
Trustee shall have the rights and remedies of a secured party under the
Uniform Commercial Code, as enacted in the jurisdiction in which the related
portion of the Trust Estate is located, as well as all other rights and
remedies available at law or in equity, and, at Trustee's option, Trustee may
also invoke the remedies provided elsewhere in this Indenture as to such
portion of the Trust Estate.
This Indenture constitutes a financing statement filed as a fixture
filing under the Uniform Commercial Code as enacted in each jurisdiction in
which the Property is located, filed in the real estate records of the county
in which the Property is located with respect to any and all fixtures
included within the term "Trust Estate" and with respect to any goods or
other personal property that may now be or hereafter become such a fixture.
PARTS OF THE COLLATERAL ARE, OR ARE TO BECOME, FIXTURES ON THE REAL ESTATE.
Owner and Trustee agree that the filing of any such financing
statement or statements in the records normally having to do with personal
property shall not in any way affect the agreement of Owner and Trustee that
everything used by Owner, its agents, employees, and contractors and owned by
Owner in connection with the production of income from the Property or
adapted for use therein or which is described or reflected in this Indenture,
and at all times and for all purposes and in all proceedings, legal or
equitable, shall be, regarded as part of the real estate conveyed hereby
regardless of whether (i) any such item is physically attached to the
improvements, (ii) serial numbers are used for the better identification of
certain items, or (iii) any such item is referred to or reflected in any such
financing statement or statements so filed at any time.
Similarly, the mention in any such financing statement or statements
of the rights in and to (i) the proceeds of any fire and/or hazard insurance
policy, or (ii) any award in eminent domain proceedings for a taking or for
loss of value, or (iii) Owner's interest as lessor in any present or future
lease or the rights of Owner to income growing out of the use and/or
occupancy of the Property, whether pursuant to lease or otherwise, shall not
in any way alter any of the rights of Trustee's security interest granted
hereby or by any other recorded document, it being understood and agreed that
such mention in such financing statement or statements is solely for the
protection of Trustee in the event any court shall at any time hold with
respect to the foregoing clauses (i), (ii), or (iii) of this sentence, that
notice of Trustee's priority of interest, to be effective against a
particular class of persons, must be filed in the Uniform Commercial Code
Records.
Owner warrants that (i) Owner's (that is, "Debtor's") name, identity
or corporate structure are as set forth on page one hereof; and (ii) the
location of the tangible personal property subject to the grant in the first
sentence of the second paragraph of this Section 10.3 is upon the Land
Parcels. Owner covenants and agrees that Owner will furnish Trustee with
notice of any change in the matters addressed by clauses (i) or (ii) of this
paragraph within thirty (30) days of the effective date of any such change
and Owner will promptly execute any financing statements or other instruments
reasonably deemed necessary by the Trustee to prevent any filed financing
statement from losing its perfected status.
The information contained in this Section is provided in order that
this Indenture shall comply with the requirements of the Uniform Commercial
Code, as enacted in each state in which the Property is located, for
instruments to be filed as financing statements. The "Debtor" is Owner and
the "Secured Party" is Trustee, the identity or corporate structure and
residence or principal place of business of "Debtor" is set forth in the
introductory paragraph of this Indenture, supra; the mailing address of the
"Secured Party" from which information concerning the security interest may
be obtained, and the mailing address of "Debtor", are as set forth in the
introductory paragraph of this Indenture; and a statement indicating the
types, or describing the terms, of collateral is set forth in the Granting
Clauses above. The maturity date of the Notes is set forth in Section 2.1
hereof and in the Notes.
10.4 Modifications; Waiver; Notices. This Indenture may not be
modified except by an instrument in writing executed by Owner and the
Trustee. No requirement hereof may be waived at any time except by a writing
signed by the party against whom such wavier is sought to be enforced nor
shall any waiver be deemed a waiver of any subsequent breach or default. All
notices, offers, acceptances, rejections, consents, requests and other
communications hereunder shall be in writing and shall be mailed by reputable
overnight delivery service or by facsimile followed by hard copy thereof
mailed by reputable overnight delivery service, or delivered by hand as
follows:
If to Owner: Agree Facility No. I, L.L.C.
31850 Northwestern Highway
Farmington Hills, Michigan 48334
Attention: Richard Agree
FAX: 248-737-9110
If to the Trustee: Manufacturers and Traders Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
Attention: Corporate Trust & Agency Services
FAX: 716-842-4474
If to Lessee: Walgreen Co.
200 Wilmot Road
Deerfield, Illinois 50015
Attention: Law Department
FAX: 847-914-2825
If to the
Registered
Owners
of the Notes: Their respective address on the Register.
or to such other person or address as any such party shall furnish to the
other parties in writing. Notwithstanding the foregoing, notices of defaults
described in Section 7.1(a) hereof may be by telephonic notice to Owner by
actual person to person contact with the person holding the position with
Owner designated above followed by facsimile notice. The Trustee shall
deliver to the Registered Owners of the Notes a copy of each notice received
by the Trustee pursuant to this Indenture or any of the operative documents.
10.5 Illegal Provision. If any provision herein or in the Notes
shall be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Indenture shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
10.6 Maximum Interest Payable. Neither this Indenture nor the Notes
or any other document shall require the payment or permit the collection of
interest in excess of the maximum amount not prohibited by law. If herein or
in the Notes any excess of interest in such respect is provided for or shall
be adjudicated to be so provided for, neither Owner nor its successors or
assigns shall be obligated to pay such interest in excess of the maximum
amount not prohibited by law, and the right to demand the payment of any such
excess shall be and hereby is waived and any excess shall be promptly
refunded; and this provision shall control any other provision of this
Indenture or the Notes.
10.7 Satisfaction. If and when the Notes shall have become due and
payable (whether by lapse of time or by acceleration or by the exercise of
the privilege of prepayment), and Owner shall have paid or caused to be paid
the full amount of the aggregate principal, interest and premium, if any, on
the Notes and shall also pay or cause to be paid all other sums payable
hereunder by Owner under this Indenture, then and in that case this Indenture
shall become null and void and shall be released, all at the cost of Owner.
10.8 Binding Effect. The covenants, conditions and agreements herein
contained shall bind, and the benefits and advantages shall inure to, the
respective heirs, executors, administrators, successors and assigns of the
parties hereto. Whenever used, the singular shall include the plural, the
plural include the singular and the use of any gender shall include all
genders.
10.9 Counterparts. This Indenture may be executed in counterparts,
and each counterpart, for purposes of recording in a particular county, may
include as part of Schedule A legal descriptions of only the Property located
in such county. All counterparts shall constitute one instrument.
10.10 Table of Contents; Headings. The table of contents contained
herein and the headings of the various Articles, Sections and Schedules
herein have been inserted for reference only and shall not to any extent have
the effect of modifying or amending the express terms and provisions hereof.
10.11 Governing Law. This Indenture (except for the provisions of
Article 8) shall be governed by the laws of the State of Michigan. The
provisions of Article 8 hereof with regard to the rights, remedies and
obligations of the Trustee shall be determined in accordance with the laws of
the State of New York.
10.12 Estoppels. At any time and from time to time upon not less
than fifteen (15) days' prior request by any party hereto, the other parties
hereto shall furnish a certificate certifying that this Indenture is in full
force and effect (or that this Indenture is in full force and effect as
modified and setting forth the modifications); to the best knowledge of the
signer of such certificate, whether or not Owner is in default under any of
is obligations hereunder (and, if so, the nature of such alleged default);
and such other matters as may reasonably be requested.
10.13 Attorneys' Fees. As used in this Indenture, the terms
"attorneys' fees" and "reasonable attorneys' fees" shall mean fees based upon
time actually spent and based upon normal hourly rates charged by attorneys
in the city in which the attorney charging such fee is located handling
similar matters.
ARTICLE 11
Michigan Provisions
11.1 Inconsistencies. In the event of any inconsistencies between
the terms and conditions of Article 11 of this Indenture and the terms and
conditions of any other Article of this Indenture, the terms and conditions
of Article 11 shall control and be binding.
11.2 Additional Remedies. The Trustee shall also be entitled to all
the rights and remedies conferred by Act No. 210 of the Michigan Public Acts
of 1953 as amended by Act No. 151 of the Michigan Public Acts of 1966
(M.C.L.A. Section 554.231 et seq.), Act No.228 of the Michigan Public Acts of
1925 (M.C.L.A. Section 554.211 et. seq.) and Act No.210 of the Michigan
Public Acts of 1933 (M.C.L.A. Section 451.401 et seq.).
11.3 Waste. Owner's failure, refusal or neglect to pay any taxes
levied against the Property or any insurance premiums due upon policies of
insurance covering the Property, shall constitute waste under Act No. 236 of
the Michigan Public Acts of 1961 as amended (M.C.L.A. 600.2927, and the
Trustee, at the direction of the Majority Registered Owners shall have a
right to appointment of a receiver of the Property and of the earnings,
income, and profits thereof, with such powers as the court making such
appointment confers and Owner hereby irrevocably consents to such appointment
in such event, and agrees to pay the costs and expenses of the Trustee and/or
the Registered Owners of the Notes incurred in such proceeding, including
reasonable attorney fees. Payment by the Trustee for and on behalf of Owner
of any delinquent taxes, assessments, or insurance premiums payable by Owner
under the terms of this Indenture shall not cure the default herein
described, nor shall it in any manner impair the Trustee's right to the
appointment of a receiver as set forth herein.
11.4 Sale. In the event of a sale, by foreclosure or otherwise, of
less than all of the Property, this Indenture shall continue as a lien and
security interest on the remaining portion of the Property. Owner hereby
waives all rights to a hearing prior to sale in connection with any
foreclosure of this Indenture by advertisement and all notice requirements
except as set forth in the Michigan statute providing for foreclosure by
advertisement.
11.5 Michigan Law. In connection with the Trustee's right to
possession of the Property Owner acknowledges that it has been advised that
there is a significant body of law in Michigan which purportedly provides
that in the absence of a showing of waste of a character sufficient to
endanger the value of the Property (or of other special factors) a person in
the role of Owner is entitled to remain in possession of the Property and to
enjoy the earnings, revenues, rents, issues, profits and income of the
Property during the pendency of foreclosure proceedings and until the
expiration of the redemption period, notwithstanding that the mortgage
expressly provides to the contrary. Owner further acknowledges that it has
been advised that the Registered Owners consider that the value of the
security granted hereby is inextricably intertwined with the effectiveness of
the management, maintenance and general operation of the Property and that
the Registered Owners would not make the loan secured hereby unless they
could be assured that the Trustee, at the direction of the Majority
Registered Owners, would have the right to take possession of the Property
and manage or control management thereof and collect and receive for the
benefit of the Registered Owners of the Notes the earnings, revenues, rents,
issues, profits and income of the Property immediately upon an Event of
Default notwithstanding that foreclosure proceedings may not have been
instituted or are pending or that the redemption period, if any, may not have
expired. Owner hereby knowingly, intelligently and voluntarily waives all
rights to possession of the Property from and after the occurrence of an
Event of Default and upon demand for possession by the Trustee Owner agrees
not to assert any objection or defense to the Trustee's request or to
petition to a court for possession, and hereby consents to the appointment of
a receiver for the Property. The rights hereby conferred upon the Trustee
have been agreed upon prior to the occurrence of an Event of Default and the
exercise by the Trustee of these rights shall not be deemed to put the
Trustee in the status of a "mortgagee in possession." Owner acknowledges that
this provision is material to this transaction and that the Registered Owners
would not make the loan secured hereby but for this Subsection 11.5.
11.6 Waiver. This Indenture contains a power of sale and upon an
Event of Default may be foreclosed by advertisement. In a foreclosure by
advertisement, no hearing is involved and the only notice required is
publication of a foreclosure notice in a local newspaper and posting of a
copy of the notice upon the Property. If this Indenture is foreclosed by
advertisement under the provisions of Michigan Compiled Laws 600.3201 et
seq., OWNER HEREBY KNOWINGLY, VOLUNTARILY, AND INTELLIGENTLY WAIVES ALL
RIGHTS UNDER THE CONSTITUTION AND LAWS OF THE STATE OF MICHIGAN AND THE
CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA TO ANY NOTICE OR
HEARING IN CONNECTION WITH SAID FORECLOSURE BY ADVERTISEMENT EXCEPT AS SET
FORTH IN THE SAID MICHIGAN STATUTE PROVIDING FOR FORECLOSURE BY
ADVERTISEMENT.
OWNER ALSO HEREBY WAIVES ANY RIGHT TO NOTICE, OTHER THAN THE NOTICE
PROVIDED BY MICHIGAN COMPILED LAWS 554.231 ET SEQ. AND 554.211 ET SEQ. AND
MICHIGAN COMPILED LAWS 565.81 ET SEQ., EACH AS AMENDED, AND WAIVES ANY RIGHT
TO ANY HEARING, JUDICIAL OR OTHERWISE, PRIOR TO THE TRUSTEE'S EXERCISE OF ITS
RIGHTS UNDER THIS INDENTURE.
11.7 Future Advances. This Indenture is a "Future Advance Mortgage"
under Public Act 348 of Michigan Public Acts of 1990. All future advances
under the Notes or under any other document executed in connection with this
Indenture shall have the same priority as if the future advance was made on
the date this Indenture was recorded. This Indenture shall secure all
indebtedness of Owner, its successors and assigns under the Notes or under
any other document executed in connection with this Indenture, whenever
incurred, such indebtedness to be due at the times provided in the Notes or
in any other applicable document executed in connection with this Indenture.
Notice is hereby given that the indebtedness secured hereby may increase as a
result of any defaults hereunder by Owner due to, for example, and without
limitation, unpaid interest or late charges, unpaid taxes or insurance
premiums which the Trustee elects to advance, defaults under leases that
Owner elects to cure, attorney fees or costs incurred in enforcing this
Indenture or any other document executed in connection herewith or other
expenses incurred by the Trustee in protecting the Property, the security of
this Indenture or the Trustee's rights and interests.
11.8 Judicial Foreclosure. In addition to all other applicable
Michigan statutes noted herein regarding the rights of the Trustee to
foreclose the lien of this Indenture, the Trustee shall have the benefit of
M.C.L.A. Section 600.3170 and M.C.L.A. 451.401 et seq.
11.9 Trust Mortgage. It is the intent of the Registered Owners, the
Owner and the Trustee that this Indenture be deemed and considered a trust
mortgage under the laws of the State of Michigan and that the Trustee shall
be entitled to exercise all rights and remedies of a trustee under a trust
mortgage in accordance with and pursuant to Michigan law, including without
limitation M.C.L.A. Sections 554.211 et seq., 600.3170 and 451.401 et seq. In
the event that this Indenture were to be deemed not to constitute a trust
mortgage for any reason whatsoever, then the parties hereto intend and expect
that this Indenture shall be deemed and considered for all purposes as a
mortgage under the laws of the State of Michigan and that the Trustee shall
be entitled to exercise all rights and remedies of a mortgagee under Michigan
law, including without limitation M.C.L.A. Section 554.231 et seq. The
parties hereto acknowledge that this provision is material to this
transaction and that the Registered Owners would not make the loan secured
hereby but for this Section 11.9.
HART01-258870-6
89535/00510
IN WITNESS WHEREOF, the parties hereto have each caused this
Indenture to be duly executed and delivered under seal as of the date first
above written.
OWNER
AGREE FACILITY NO. I, L.L.C.
a Delaware limited liability company
By: Agree Limited Partnership
a Delaware limited partnership
Its: Member
Witness: /s/ Leon M. Schurgin By: Agree Realty Corporation
Print Name: Leon M. Schurgin a Maryland corporation
Its: General Partner
Witness: /s/ Patricia L. Chapman By: /s/ Richard Agree
Print Name: Patricia L. Chapman Richard Agree, Its President
TRUSTEE
Witness: /s/ Pat Pattanayak MANUFACTURERS AND TRADERS
Print Name Pat Pattanayak TRUST COMPANY
Witness: /s/ Jeffrey S. Stone By: /s/ Russell T. Whitley
Print Name Jeffrey S. Stone Name: Russell T. Whitley
Title: Assistant Vice President
State of Michigan )
) ss.
County of Oakland )
On this, the 23rd day of June, 1999, before me, a Notary Public,
personally appeared Richard Agree, who acknowledged himself to be the
President of Agree Realty Corporation, a Maryland corporation, the general
partner of Agree Limited Partnership, a Delaware limited partnership, a
member of Agree Facility No. I, L.L.C., a Delaware limited liability company
and that he, as such President, being authorized to do so, executed the
foregoing instrument for the purposes therein contained by signing his name
as President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Patricia L. Chapman
Notary Public
My commission expires: Sep. 18, 2002
State of New York )
) ss.
County of Erie )
On this, the 24th day of June, 1999, before me, a Notary Public,
personally appeared Russell T. Whitley, who acknowledged himself to be a
Asst Vice President of Manufacturers and Traders Trust Company, a New York
banking corporation, as Trustee, and that he, as such Asst Vice President,
being authorized to do so, executed the foregoing instrument for the
purposes therein contained by signing his name as Asst Vice President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Aaron G. McNanus
Notary Public
My commission expires: Nov 4, 2000
Schedule A-1
[Chesterfield Property Legal Description]
SCHEDULE A-1
LEGAL DESCRIPTION
Commitment No.: CM-314061
Land in the Township of Chesterfield, Macomb County, Michigan, described as
follows:
PARCEL 1: Land in the Southwest 1/4 of Section 17, Town 3 North, Range 14
East, Chesterfield Township, Macomb County, Michigan, described as
commencing at the South 1/4 corner of Section 1 7; thence along the Section
line North 86 degrees 43 minutes 25 seconds West 1249.71 feet to the point of
beginning; thence continuing along the Section line North 86 degrees 43
minutes 25 seconds West 252.38 feet to the centerline of Gratiot Avenue;
thence along said centerline North 31 degrees 12 minutes 00 seconds East
412.67 feet; thence South 58 degrees 48 minutes 00 seconds East 223.00 feet;
thence South 31 degrees 12 minutes 00 seconds West 294.48 feet to the point
of beginning.
PARCEL 2: Land in the Southwest 1/4 of Section 17, Town 3 North, Range 14
Fast, Chesterfield Township, Macomb County, Michigan, described as commencing
at the South 1/4 corner of said Section 17; thence along the section line
North 86 degrees 43 minutes 25 seconds West 1085.00 feet to the point of
beginning; thence continuing along the section line North 86 degrees 43
minutes 25 seconds West 164.17 feet; thence North 31 degrees 12 minutes 00
seconds East 294.48; thence South 58 degrees 48 minutes 00 seconds East
145.53; thence South 31 degrees 12 minutes 00 seconds West 217.35 to the
point of beginning.
Tax Item No. 09-17-376-015 Parcel I & 2, Covers More Land
Schedule A-2
[Grand Blanc Property Legal Description]
SCHEDULE A-2
That certain real property, with the appurtenances thereto, situated
in the Township of Grand Blanc, Genesee County, Michigan and described as
follows:
Unit 2 of GRAND BLANC I CONDOMINIUM, a Condominium according to the
Master Deed thereof recorded in Liber 3699, page 806, Genesee County Records,
and designated as Genesee County Condominium Subdivision Plan No. 199, and
any amendments thereto, together with an undivided interest in the common
elements of said condominium as set forth in said Master Deed and as
described in Act 59 of the Public Acts of Michigan of 1978, as amended,
together with all limited common elements allocated to Unit 2 as set forth in
said Master Deed.
HARTOI-269842-1
89535-00510
June 22, 1998 8:16 PM
Schedule A-3
[Pontiac Property Legal Description]
SCHEDULE A-3
LEGAL DESCRIPTION
Commitment No.: CM-314063
Land in the City of Pontiac, Oakland County, Michigan, described as follows:
That part of the Northeast 1/4 of Section 21, Town 3 North, Range 10 East,
City of Pontiac, Oakland County, Michigan, and that part of Lots 155 and 156
of Assessors's Plat No. 13, according to the plat thereof, as recorded in
Liber IA of Assessor's Plats, page 13, Oakland County Records, more
particularly described as; beginning at the intersection of the Southerly
line of Lot 155, said line also being the Northerly line of Balboa Place
(formerly Bond Street), and the Northeasterly line of Martin Luther King
Boulevard (also known as East Boulevard); thence North 47 degrees 08 minutes
30 seconds West 63.63 feet along the Northeasterly line of Martin Luther King
Jr. Boulevard; thence continuing North 53 degrees 32 minutes 05 seconds West
422.95 feet along the Northeasterly line of Martin Luther King Jr. Boulevard
to its intersection with the Southeasterly line of Perry Street; thence North
42 degrees 29 minutes 19 seconds East 125.53 feet along the Southeasterly
line of Perry Street; thence South 46 degrees 00 minutes 38 seconds East
60.00 feet to the Northerly line of Lot 156; thence North 88 degrees 14
minutes 20 seconds East 276.62 feet along the Northerly line of Lots 156 and
155 to the Northeast corner of Lot 155; thence South 02 degrees 35 minutes 10
seconds Fast 353.29 feet along the Easterly line of Lot 155 to the Southeast
corner of Lot 155, said point being on the Northerly line of Balboa Place;
thence South 88 degrees 05 minutes 00 seconds West 33.61 feet along the
Northerly line of Balboa Place to the point of beginning.
Tax Item No. 14-21-404-003
Tax Item No. 14-21-404-001
Tax Item No. 14-21-276-001
Schedule A-4
[Waterford Property Legal Description]
SCHEDULE A-4
LEGAL DESCRIPTION
Commitment Number: CM-314062
Land in the Township of Waterford, Oakland County, Michigan, described as
follows:
That parts of Lot(s) 22,26,27,107 and the entire Lots 23,24,25,105,106'and
the vacated Oakview Road adjacent thereto of DIXIE TRAIL SUBDIVISION,
according to the plat thereof recorded in Liber 46 of Plats, page(s) 39 of
Oakland County Records, described as: Commencing at the Southeast corner of
Lot 26; thence North 88 degrees 31 minutes 00 seconds West 32.50 feet along
the South line of Lot 26, also the North line of Walton Boulevard to the
point of beginning; thence continuing along the North line of Walton
Boulevard, North 88 degrees 31 minutes 00 seconds West 126.00 feet; thence
North 42 degrees 22 minutes 00 seconds West 197.32 feet along the Northerly
line of Dixie Highway; thence North 47 degrees 38 minutes 00 seconds East
70.00 feet; - thence North 48 degrees 36 minutes 34 seconds East 46.59 feet;
thence North 39 degrees 38 minutes 33 seconds East 97.74 feet to the
Northwest corner of Lot 105; thence South 88 degrees 20 minutes 26 seconds
East 301.88 feet along the North line of Lot 105 to the Northeast corner of
Lot 105; thence South 01 degree 50 minutes IO seconds West 130.00 feet along
the East line of Lots 105, 106 and 107; thence North 88 degrees 20 minutes 27
seconds West 107.17 feet; thence South 39 degrees 38 minutes 33 seconds West
123.15 feet; thence South 01 degree 35 minutes 13 seconds West 71.91 feet to
the point of beginning.
Together with a 30 foot easement for ingress and egress described as: The
East 30 feet of Lot 29 and the East 30 feet of the South 20 feet of Lot 107
of DIXIE TRAIL SUBDIVISION, according to the plat thereof recorded in Liber
46 of plats, page 39, Oakland County Records.
Tax Item No. 13-03-376-048
Schedule B
[Form of the Notes]
SCHEDULE B
TO INDENTURE
FORM OF
6.63% SECURED NOTE, DUE FEBRUARY 5, 2017
Registered No. 1
Private Placement No.: 00850# AA 5
AGREE FACILITY NO. 1, L.L.C., a Delaware limited liability company
(collectively "Owner'), for value received, hereby promises to pay TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA (the "Payee"), or registered
assigns on or before February 5, 2017, as herein provided, the principal sum
of TWELVE MILLION THREE HUNDRED NINETY THOUSAND ONE HUNDRED THIRTY-FIVE AND
34/100 DOLLARS ($12,390,135.34) and to pay interest on the unpaid principal
amount hereof from the date hereof to maturity at the rate of 6.63% per
annum (computed on the basis of a 360 day year consisting of twelve 30-day
months), payable (a) in one initial payment of interest only from the date
Payee advances funds hereunder to July 5, 1999 and (B) thereafter in monthly
Installment Payments of principal and interest in arrears on the fifth (5th)
day of each month commencing on August 5, 1999 and continuing to and
including February 5, 2017 (the "Installment Payments"), such Installment
Payments to be in respective amounts specified on the amortization
schedule attached hereto. Interest shall accrue on any overdue amount
hereunder at the rate of 8.83% per annum from the due date thereof until the
date of payment. Capitalized terms contained herein shall have the meanings
as set forth in the Trust Mortgage (the "Indenture"), dated as of June __,
1999, between Owner and Manufacturers and Traders Trust Company, as trustee
(the "Trustee").
Such principal, Make-Whole Premium (as defined in the Indenture), if
any, and interest shall be payable to Payee by wire transfer or Automated
Clearing House System to Chase Manhattan Bank, N.A., ABA# 021-000-021,
Account# 900-9000200 for further credit to TIAA account no. G07040,
referencing PPN 00850#. AA 5, Agree Facility No. 1, L.L.C., 6.63% Secured
Note due February 5, 2017, and specifying the amount of each of principal and
interest represented by each such payment or at such other-place or address
as the Payee shall indicate in writing to Owner, in lawful money of the
United States of America.
Each Installment Payment, when paid, shall be applied first to the
payment of interest accrued and on the unpaid principal amount of this
Note to and including the day prior to the date fixed for such payment, and
second to payment on account of the principal hereof. The Installment
Payments and any other payment or prepayment with respect to this Note shall
be made by Owner to the Payee without presentation of this Note for notation
hereof.
This Note is secured by (i) a first mortgage lien on the interest
of Owner in the rights and property (the "Mortgaged Property") created by the
Indenture, relating to four (4)
HART01-271829-1
8953-00510
June 22, 1998 8:39 pm
-2-
parcels of land and the improvements thereon located in Michigan, and (ii)
the Assignment of Leases and Rents, dated as of June _, 1999 (herein, called
the "Assignment") from Owner, as assignor, to the Trustee, as assignee,
relating to the leases described therein between Owner, as lessor, and
Walgreen Co., an Illinois corporation, as lessee. The Indenture and the
Assignment are hereby incorporated by reference in and made a part of this
Note.
The principal of this Note is subject to prepayment from time to
time, in the manner and under the circumstances set forth in the Indenture at
a price equal to 100% of the principal amount hereof to be prepaid, plus
accrued and unpaid interest thereon to the date fixed for prepayment plus any
additional sums as set forth in the Indenture, together with the Make-Whole
Premium, if any, specified in the Indenture. Upon any such prepayment, each
Installment Payment which shall thereafter be due and payable on this Note
shall be proportionately decreased in accordance with actuarial practice so
that upon the due payment of 0 remaining Installment Payments there shall
have been paid to the Payee the entire unpaid principal balance of this Note,
together with accrued interest hereon.
Upon the occurrence and during the continuance of an Event of
Default specified in the Indenture, the principal hereof, the Make-Whole
Premium hereon, if any, and the interest accrued and unpaid hereon may be
declared to be forthwith due and payable as provided in the Indenture.
This Note is issuable only as a fully registered Note. Owner shall
deem and treat the person in whose name this Note is registered on the
Register as the absolute owner hereof (whether or not this Note shall be
overdue) for the purpose of receiving payments of principal, Make-Whole
Premium and interest and for all other purposes, and Payee shall not be
affected by any notice to the contrary. In accordance with the provisions of
the Indenture, this Note may be transferred and exchanged for Notes of other
denominations.
Should the indebtedness represented by this Note or any part thereof
be collected at law or in equity or in bankruptcy, receivership or
other-court proceeding or should this Note be placed in the hands of
attorneys for collection during the continuance of an Event of Default, Owner
agrees to pay, in addition to the principal, Make-Whole Premium, if any, and
interest due and payable hereon, all reasonable costs of collecting or
attempting to collect this Note, including reasonable attorneys' fees and
expenses (including those incurred in connection with any appeal).
Anything contained herein or in the Indenture to the contrary
notwithstanding, no recourse shall be had for the payment of the principal of
or interest or Make-Whole Premium, if any, on this Note or for any claim
based hereon or otherwise in respect hereof or based on or in respect of the
Indenture against any partner or member of the Issuer in his, her or its
individual capacity, except as provided in Article 10. I of the Indenture.
HART01-271829-1
8953-00510
June 22, 1998 8:39 pm
-3-
This Note shall be governed by the law of the State of Michigan.
HART01-271829-1
8953-00510
June 22, 1998 8:39 pm
-4-
IN WITNESS WHEREOF, Owner has caused this 6.63% Senior Secured
Note, Due February 5, 2017, to be duly executed.
Dated: June ___, 1999
AGREE FACILITY NO. 1, L.L.C.
a Delaware limited liability company
By: Agree Limited Partnership
a Delaware limited partnership
Its: Member
By: Agree Realty Corporation
a Maryland corporation
Its: General Partner
By: ____________________________
Richard Agree, Its President
Certificate of Authentication
This Note is one of the 6.63% Secured Notes due February 5, 2017, of
Agree Facility No. 1, L.L.C. described in the within-mentioned Indenture.
Manufacturers and Traders Trust Company, as trustee
By: ____________________________
Name:
HART01-271829-1
8953-00510
June 22, 1998 8:39 pm
<TABLE>
<CAPTION>
Agree Limited Partnership
Consolidated Amortization Schedule
$12,390,135.34 Debt
6.63% Debt Rate / 10.5 Year Average Life / 7.2 Year Duration
Cash Flow
- ---------------------------------------------------------------------------------------------------------------------------
Total Trustee Available Debt Free
Date Waterford Chesterfield Pontiac Grand Blanc Rent Reserves Fee Cash Service Cash
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/25/99
07/05/99 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 22,818.50 81,759.51
08/05/99 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/99 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/99 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/99 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/99 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/00 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/01 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/02 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/03 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/04 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/05 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/06 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/07 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/08 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/09 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/10 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/11 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/12 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/13 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/14 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/15 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
03/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
04/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
05/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
06/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
07/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
08/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
09/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
10/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
11/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
12/05/16 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
01/05/17 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
02/05/17 25,492.50 27,942.25 25,625.00 26,709.16 105,768.91 982.56 208.34 104,578.01 99,598.10 4,979.91
<CAPTION>
Agree Limited Partnership
Consolidated Amortization Schedule
$12,390,135.34 Debt
6.63% Debt Rate / 10.5 Year Average Life / 7.2 Year Duration
Debt Amortization Schedule
- ---------------------------------------------------------------------------------
Principal Interest Principal Debt
Pmt Date Balance Payment Payment Service
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
06/25/99 12,390,135.34
07/05/99 12,390,135.34 22,818.50 0.00 22,818.50
1 08/05/99 12,358,992.74 68,455.50 31,142.60 99,598.10
2 09/05/99 12,327,678.07 68,283.43 31,314.67 99,598.10
3 10/05/99 12,296,190.39 68,110.42 31,487.68 99,598.10
4 11/05/99 12,264,528.73 67,936.44 31,661.66 99,598.10
5 12/05/99 12,232,692.15 67,761.52 31,836.58 99,598.10
6 01/05/00 12,200,679.66 67,585.61 32,012.49 99,598.10
7 02/05/00 12,168,490.30 67,408.74 32,189.36 99,598.10
8 03/05/00 12,136,123.11 67,230.91 32,367.19 99,598.10
9 04/05/00 12,103,577.10 67,052.09 32,546.01 99,598.10
10 05/05/00 12,070,851.26 66,872.26 32,725.84 99,598.10
11 06/05/00 12,037,944.61 66,691.45 32,906.65 99,598.10
12 07/05/00 12,004,856.16 66,509.65 33,088.45 99,598.10
13 08/05/00 11,971,584.90 66,326.84 33,271.26 99,598.10
14 09/05/00 11,938,129.81 66,143.01 33,455.09 99,598.10
15 10/05/00 11,904,489.87 65,958.16 33,639.94 99,598.10
16 11/05/00 11,870,664.08 65,772.31 33,825.79 99,598.10
17 12/05/00 11,836,651.41 65,585.43 34,012.67 99,598.10
18 01/05/01 11,802,450.80 65,397.49 34,200.61 99,598.10
19 02/05/01 11,768,061.24 65,208.54 34,389.56 99,598.10
20 03/05/01 11,733,481.68 65,018.54 34,579.56 99,598.10
21 04/05/01 11,698,711.06 64,827.48 34,770.62 99,598.10
22 05/05/01 11,663,748.34 64,635.38 34,962.72 99,598.10
23 06/05/01 11,628,592.45 64,442.21 35,155.89 99,598.10
24 07/05/01 11,593,242.32 64,247.97 35,350.13 99,598.10
25 08/05/01 11,557,696.88 64,052.66 35,545.44 99,598.10
26 09/05/01 11,521,955.05 63,856.27 35,741.83 99,598.10
27 10/05/01 11,486,015.74 63,658.79 35,939.31 99,598.10
28 11/05/01 11,449,877.88 63,460.24 36,137.86 99,598.10
29 12/05/01 11,413,540.35 63,260.57 36,337.53 99,598.10
30 01/05/02 11,377,002.07 63,059.82 36,538.28 99,598.10
31 02/05/02 11,340,261.91 62,857.94 36,740.16 99,598.10
32 03/05/02 11,303,318.76 62,654.95 36,943.15 99,598.10
33 04/05/02 11,266,171.50 62,450.84 37,147.26 99,598.10
34 05/05/02 11,228,819.00 62,245.60 37,352.50 99,598.10
35 06/05/02 11,191,260.13 62,039.23 37,558.87 99,598.10
36 07/05/02 11,153,493.75 61,831.72 37,766.38 99,598.10
37 08/05/02 11,115,518.71 61,623.06 37,975.04 99,598.10
38 09/05/02 11,077,333.85 61,413.24 38,184.86 99,598.10
39 10/05/02 11,038,938.02 61,202.27 38,395.83 99,598.10
40 11/05/02 11,000,330.04 60,990.12 38,607.98 99,598.10
41 12/05/02 10,961,508.77 60,776.83 38,821.27 99,598.10
42 01/05/03 10,922,473.00 60,562.33 39,035.77 99,598.10
43 02/05/03 10,883,221.56 60,346.66 39,251.44 99,598.10
44 03/05/03 10,843,753.26 60,129.80 39,468.30 99,598.10
45 04/05/03 10,804,066.90 59,911.74 39,686.36 99,598.10
46 05/05/03 10,764,161.28 59,692.48 39,905.62 99,598.10
47 06/05/03 10,724,035.18 59,472.00 40,126.10 99,598.10
48 07/05/03 10,683,687.37 59,250.29 40,347.81 99,598.10
49 08/05/03 10,643,116.65 59,027.38 40,570.72 99,598.10
50 09/05/03 10,602,321.78 58,803.23 40,794.87 99,598.10
51 10/05/03 10,561,301.51 58,577.83 41,020.27 99,598.10
52 11/05/03 10,520,054.59 58,351.18 41,246.92 99,598.10
53 12/05/03 10,478,579.79 58,123.30 41,474.80 99,598.10
54 01/05/04 10,436,875.84 57,894.15 41,703.95 99,598.10
55 02/05/04 10,394,941.48 57,663.74 41,934.36 99,598.10
56 03/05/04 10,352,775.44 57,432.06 42,166.04 99,598.10
57 04/05/04 10,310,376.42 57,199.08 42,399.02 99,598.10
58 05/05/04 10,267,743.14 56,964.82 42,633.28 99,598.10
59 06/05/04 10,224,874.33 56,729.29 42,868.81 99,598.10
60 07/05/04 10,181,768.67 56,492.44 43,105.66 99,598.10
61 08/05/04 10,138,424.84 56,254.27 43,343.83 99,598.10
62 09/05/04 10,094,841.54 56,014.80 43,583.30 99,598.10
63 10/05/04 10,051,017.45 55,774.01 43,824.09 99,598.10
64 11/05/04 10,006,951.23 55,531.88 44,066.22 99,598.10
65 12/05/04 9,962,641.53 55,288.40 44,309.70 99,598.10
66 01/05/05 9,918,087.03 55,043.60 44,554.50 99,598.10
67 02/05/05 9,873,286.36 54,797.43 44,800.67 99,598.10
68 03/05/05 9,828,238.17 54,549.91 45,048.19 99,598.10
69 04/05/05 9,782,941.08 54,301.01 45,297.09 99,598.10
70 05/05/05 9,737,393.73 54,050.75 45,547.35 99,598.10
71 06/05/05 9,691,594.72 53,799.09 45,799.01 99,598.10
72 07/05/05 9,645,542.68 53,546.06 46,052.04 99,598.10
73 08/05/05 9,599,236.20 53,291.62 46,306.48 99,598.10
74 09/05/05 9,552,673.89 53,035.79 46,562.31 99,598.10
75 10/05/05 9,505,854.32 52,778.53 46,819.57 99,598.10
76 11/05/05 9,458,776.07 52,519.85 47,078.25 99,598.10
77 12/05/05 9,411,437.72 52,259.75 47,338.35 99,598.10
78 01/05/06 9,363,837.81 51,998.19 47,599.91 99,598.10
79 02/05/06 9,315,974.92 51,735.21 47,862.89 99,598.10
80 03/05/06 9,267,847.58 51,470.76 48,127.34 99,598.10
81 04/05/06 9,219,454.34 51,204.86 48,393.24 99,598.10
82 05/05/06 9,170,793.72 50,937.48 48,660.62 99,598.10
83 06/05/06 9,121,864.26 50,668.64 48,929.46 99,598.10
84 07/05/06 9,072,664.47 50,398.31 49,199.79 99,598.10
85 08/05/06 9,023,192.84 50,126.47 49,471.63 99,598.10
86 09/05/06 8,973,447.87 49,853.13 49,744.97 99,598.10
87 10/05/06 8,923,428.07 49,578.30 50,019.80 99,598.10
88 11/05/06 8,873,131.91 49,301.94 50,296.16 99,598.10
89 12/05/06 8,822,557.85 49,024.04 50,574.06 99,598.10
90 01/05/07 8,771,704.39 48,744.64 50,853.46 99,598.10
91 02/05/07 8,720,569.96 48,463.67 51,134.43 99,598.10
92 03/05/07 8,669,153.01 48,181.15 51,416.95 99,598.10
93 04/05/07 8,617,451.98 47,897.07 51,701.03 99,598.10
94 05/05/07 8,565,465.31 47,611.43 51,986.67 99,598.10
95 06/05/07 8,513,191.40 47,324.19 52,273.91 99,598.10
96 07/05/07 8,460,628.68 47,035.38 52,562.72 99,598.10
97 08/05/07 8,407,775.56 46,744.98 52,853.12 99,598.10
98 09/05/07 8,354,630.43 46,452.97 53,145.13 99,598.10
99 10/05/07 8,301,191.67 46,159.34 53,438.76 99,598.10
100 11/05/07 8,247,457.66 45,864.09 53,734.01 99,598.10
101 12/05/07 8,193,426.75 45,567.19 54,030.91 99,598.10
102 01/05/08 8,139,097.34 45,268.69 54,329.41 99,598.10
103 02/05/08 8,084,467.75 44,968.51 54,629.59 99,598.10
104 03/05/08 8,029,536.33 44,666.68 54,931.42 99,598.10
105 04/05/08 7,974,301.41 44,363.18 55,234.92 99,598.10
106 05/05/08 7,918,761.33 44,058.02 55,540.08 99,598.10
107 06/05/08 7,862,914.39 43,751.16 55,846.94 99,598.10
108 07/05/08 7,806,758.90 43,442.61 56,155.49 99,598.10
109 08/05/08 7,750,293.15 43,132.35 56,465.75 99,598.10
110 09/05/08 7,693,515.41 42,820.36 56,777.74 99,598.10
111 10/05/08 7,636,423.98 42,506.67 57,091.43 99,598.10
112 11/05/08 7,579,017.13 42,191.25 57,406.85 99,598.10
113 12/05/08 7,521,293.10 41,874.07 57,724.03 99,598.10
114 01/05/09 7,463,250.14 41,555.14 58,042.96 99,598.10
115 02/05/09 7,404,886.50 41,234.46 58,363.64 99,598.10
116 03/05/09 7,346,200.40 40,912.00 58,686.10 99,598.10
117 04/05/09 7,287,190.07 40,587.77 59,010.33 99,598.10
118 05/05/09 7,227,853.69 40,261.72 59,336.38 99,598.10
119 06/05/09 7,168,189.48 39,933.89 59,664.21 99,598.10
120 07/05/09 7,108,195.62 39,604.24 59,993.86 99,598.10
121 08/05/09 7,047,870.31 39,272.79 60,325.31 99,598.10
122 09/05/09 6,987,211.70 38,939.49 60,658.61 99,598.10
123 10/05/09 6,926,217.94 38,604.34 60,993.76 99,598.10
124 11/05/09 6,864,887.19 38,267.35 61,330.75 99,598.10
125 12/05/09 6,803,217.60 37,928.51 61,669.59 99,598.10
126 01/05/10 6,741,207.28 37,587.78 62,010.32 99,598.10
127 02/05/10 6,678,854.35 37,245.17 62,352.93 99,598.10
128 03/05/10 6,616,156.92 36,900.67 62,697.43 99,598.10
129 04/05/10 6,553,113.09 36,554.27 63,043.83 99,598.10
130 05/05/10 6,489,720.94 36,205.95 63,392.15 99,598.10
131 06/05/10 6,425,978.54 35,855.70 63,742.40 99,598.10
132 07/05/10 6,361,883.97 35,503.53 64,094.57 99,598.10
133 08/05/10 6,297,435.28 35,149.41 64,448.69 99,598.10
134 09/05/10 6,232,630.51 34,793.33 64,804.77 99,598.10
135 10/05/10 6,167,467.69 34,435.28 65,162.82 99,598.10
136 11/05/10 6,101,944.85 34,075.26 65,522.84 99,598.10
137 12/05/10 6,036,060.00 33,713.25 65,884.85 99,598.10
138 01/05/11 5,969,811.13 33,349.23 66,248.87 99,598.10
139 02/05/11 5,903,196.23 32,983.20 66,614.90 99,598.10
140 03/05/11 5,836,213.29 32,615.16 66,982.94 99,598.10
141 04/05/11 5,768,860.26 32,245.07 67,353.03 99,598.10
142 05/05/11 5,701,135.11 31,872.95 67,725.15 99,598.10
143 06/05/11 5,633,035.78 31,498.77 68,099.33 99,598.10
144 07/05/11 5,564,560.20 31,122.52 68,475.58 99,598.10
145 08/05/11 5,495,706.29 30,744.19 68,853.91 99,598.10
146 09/05/11 5,426,471.97 30,363.78 69,234.32 99,598.10
147 10/05/11 5,356,855.12 29,981.25 69,616.85 99,598.10
148 11/05/11 5,286,853.65 29,596.63 70,001.47 99,598.10
149 12/05/11 5,216,465.42 29,209.87 70,388.23 99,598.10
150 01/05/12 5,145,688.29 28,820.97 70,777.13 99,598.10
151 02/05/12 5,074,520.12 28,429.93 71,168.17 99,598.10
152 03/05/12 5,002,958.74 28,036.72 71,561.38 99,598.10
153 04/05/12 4,931,001.99 27,641.35 71,956.75 99,598.10
154 05/05/12 4,858,647.68 27,243.79 72,354.31 99,598.10
155 06/05/12 4,785,893.60 26,844.02 72,754.08 99,598.10
156 07/05/12 4,712,737.57 26,442.07 73,156.03 99,598.10
157 08/05/12 4,639,177.34 26,037.87 73,560.23 99,598.10
158 09/05/12 4,565,210.71 25,631.47 73,966.63 99,598.10
159 10/05/12 4,490,835.40 25,222.79 74,375.31 99,598.10
160 11/05/12 4,416,049.18 24,811.88 74,786.22 99,598.10
161 12/05/12 4,340,849.75 24,398.67 75,199.43 99,598.10
162 01/05/13 4,265,234.84 23,983.19 75,614.91 99,598.10
163 02/05/13 4,189,202.17 23,565.43 76,032.67 99,598.10
164 03/05/13 4,112,749.42 23,145.35 76,452.75 99,598.10
165 04/05/13 4,035,874.26 22,722.94 76,875.16 99,598.10
166 05/05/13 3,958,574.37 22,298.21 77,299.89 99,598.10
167 06/05/13 3,880,847.39 21,871.12 77,726.98 99,598.10
168 07/05/13 3,802,690.97 21,441.68 78,156.42 99,598.10
169 08/05/13 3,724,102.74 21,009.87 78,588.23 99,598.10
170 09/05/13 3,645,080.31 20,575.67 79,022.43 99,598.10
171 10/05/13 3,565,621.27 20,139.06 79,459.04 99,598.10
172 11/05/13 3,485,723.23 19,700.06 79,898.04 99,598.10
173 12/05/13 3,405,383.75 19,258.62 80,339.48 99,598.10
174 01/05/14 3,324,600.40 18,814.75 80,783.35 99,598.10
175 02/05/14 3,243,370.72 18,368.42 81,229.68 99,598.10
176 03/05/14 3,161,692.25 17,919.63 81,678.47 99,598.10
177 04/05/14 3,079,562.50 17,468.35 82,129.75 99,598.10
178 05/05/14 2,996,978.98 17,014.58 82,583.52 99,598.10
179 06/05/14 2,913,939.19 16,558.31 83,039.79 99,598.10
180 07/05/14 2,830,440.60 16,099.51 83,498.59 99,598.10
181 08/05/14 2,746,480.69 15,638.19 83,959.91 99,598.10
182 09/05/14 2,662,056.89 15,174.30 84,423.80 99,598.10
183 10/05/14 2,577,166.66 14,707.87 84,890.23 99,598.10
184 11/05/14 2,491,807.41 14,238.85 85,359.25 99,598.10
185 12/05/14 2,405,976.55 13,767.24 85,830.86 99,598.10
186 01/05/15 2,319,671.47 13,293.02 86,305.08 99,598.10
187 02/05/15 2,232,889.56 12,816.19 86,781.91 99,598.10
188 03/05/15 2,145,628.18 12,336.72 87,261.38 99,598.10
189 04/05/15 2,057,884.67 11,854.59 87,743.51 99,598.10
190 05/05/15 1,969,656.38 11,369.81 88,228.29 99,598.10
191 06/05/15 1,880,940.64 10,882.36 88,715.74 99,598.10
192 07/05/15 1,791,734.74 10,392.20 89,205.90 99,598.10
193 08/05/15 1,702,035.97 9,899.33 89,698.77 99,598.10
194 09/05/15 1,611,841.62 9,403.75 90,194.35 99,598.10
195 10/05/15 1,521,148.94 8,905.42 90,692.68 99,598.10
196 11/05/15 1,429,955.19 8,404.35 91,193.75 99,598.10
197 12/05/15 1,338,257.59 7,900.50 91,697.60 99,598.10
198 01/05/16 1,246,053.37 7,393.88 92,204.22 99,598.10
199 02/05/16 1,153,339.71 6,884.44 92,713.66 99,598.10
200 03/05/16 1,060,113.81 6,372.20 93,225.90 99,598.10
201 04/05/16 966,372.83 5,857.12 93,740.98 99,598.10
202 05/05/16 872,113.94 5,339.21 94,258.89 99,598.10
203 06/05/16 777,334.27 4,818.43 94,779.67 99,598.10
204 07/05/16 682,030.95 4,294.78 95,303.32 99,598.10
205 08/05/16 586,201.07 3,768.22 95,829.88 99,598.10
206 09/05/16 489,841.73 3,238.76 96,359.34 99,598.10
207 10/05/16 392,950.00 2,706.37 96,891.73 99,598.10
208 11/05/16 295,522.95 2,171.05 97,427.05 99,598.10
209 12/05/16 197,557.61 1,632.76 97,965.34 99,598.10
210 01/05/17 99,051.01 1,091.50 98,506.60 99,598.10
211 02/05/17 0.00 547.26 99,051.01 99,598.27
</TABLE>
EXHIBIT 1
FORM OF TRANSFEREE CERTIFICATION
Manufacturers and Traders
Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
Re: Agree Facility No. I, L.L.C. 6.63% Secured Notes Due
February 5, 2017 under the Trust Mortgage, dated as of June
__, 1999 (the "Indenture") from Agree Facility No. I,
L.L.C. ("Owner") to Manufacturers and Traders Trust
Company, as Trustee for the benefit of the Registered
Owners of the Notes
Dear Sir/Madam:
_________________________________________________ as registered
holder ("Seller") intends to transfer the captioned Note to ("Purchaser"),
for registration in the name of _____________________.
1. In connection with such transfer and in accordance with Section
2.7 of the Indenture, the Seller hereby certifies the following facts:
Neither the Seller nor anyone acting on its behalf has offered, transferred,
pledged, sold or otherwise disposed of the Note, any interest in the Note or
any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Note, any interest in the Note
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner,
or taken any other action which would constitute a distribution of the Note
under the Securities Act of 1933, as amended (the "1933 Act"), or which would
render the disposition of the Note a violation of Section 5 of the 1933 Act
or require registration pursuant thereto.
2. The Purchaser warrants and represents to, and covenants with, the
Seller, the Trustee and the Owner as follows:
(a) The Purchaser understands that the Notes have not been and will
not be registered under the 1933 Act in reliance upon the exemption provided
in Section 4(2) of the 1933 Act or any other applicable exemption, that the
Securities have not and will not be registered or qualified under the "Blue
Sky" laws of any jurisdiction, that the Securities may be resold (which
resale is not currently contemplated) or otherwise transferred only if so
registered or qualified or if an exemption from registration or qualification
is available.
(b) The Purchaser is acquiring the Note for investment for its own
account only and not for any other person.
(c) The Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Note and is able to bear the economic risk of such
investment.
(d) The Purchaser has received such information regarding the Note
as the Purchaser has requested for the Note and has reviewed such material on
its own behalf.
(e) Neither the Purchaser nor any person acting on its behalf has
made or shall make offers or sales of any of the Notes by means of any form
of general solicitation or general advertising or in any other manner, or
taken any other action which would constitute a distribution under the 1933
Act or which would render the disposition of the Notes a violation of Section
5 of the 1933 Act or require registration pursuant thereto. The Purchaser
agrees that it will not offer or sell, Transfer (as defined below), assign,
or otherwise dispose of the Notes or any interest therein except (1) pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act and any applicable state securities laws and (2)
in accordance with the provisions of the Indenture to which provision the
Purchaser hereby agrees it is subject. The Purchaser further agrees that
prior to any sale or other Transfer by the Purchaser of any of the Notes, the
Purchaser shall obtain from the Transferee (as defined below) and deliver to
the Trustee and Owner a duly executed Transferee Certificate substantially in
the form attached to the Indenture as Exhibit 1. "Transfer" shall mean any
transfer of any ownership interest, legal or beneficial, whether through a
sale, pledge, assignment, option or any other method, and "Transferor,"
"Transferee," "Transferring" and "Transferred" shall have correlative
meanings.
(f) At least one of the following statements is an accurate
representation as to each source of funds (a "Source") to be used by the
Purchaser to pay the purchase price of the Note:
(i) if the Purchaser is an insurance company, either (i)
the Source is a separate account that is maintained solely in
connection with the Purchaser's fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan
and to any participant or beneficiary of such plan (including any
annuitant) are not affected in any manner by the investment
performance of the separate account, or
(ii) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60, and the amount of reserves and liabilities
for the contract(s) held by or on behalf of each employee benefit
plan which has an interest in the Purchaser's general account as a
contractholder, together with the amount of reserves and liabilities
for the general account contracts held by or on behalf of any other
such plan maintained by the same employer (or an affiliate thereof)
or by the same employee organization, does not exceed 10% of the
total reserves and liabilities of the Purchaser's general account
plus surplus as determined pursuant to the provisions of Section
I(a) of PTE 95-60; or
(ii) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1, or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38 and,
except as the Purchaser has disclosed to the Seller, the Trustee and
the Owner in writing pursuant to this paragraph (f), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(iii) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (the "QPAM Exemption"))
managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of Part V of the QPAM Exemption), no employee
benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by
such QPAM, exceed 20% of total client assets managed by such QPAM,
the conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled
by the QPAM (applying the definition of "control" in Section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and (ii) the names of all employee
benefit plans whose assets are included in such investment fund have
been disclosed to the Company in writing pursuant to this paragraph
(f); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (f); or
(vi) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
(g) The Purchaser is a "Qualified Institutional Buyer" under Rule
144A as an insurance company, defined in Section 2(13) of the Securities Act
of 1933, as amended.
(h) The Purchaser is an "Accredited Investor" within the meaning of
Regulation D, Rule 501(a)(1), as an insurance company as defined in Section
2(13) of the 1933 Act.
(i) The Purchaser is a U.S. person, as defined in Regulation S.
3. The ownership by the Purchaser of the Note, or by the account for
which the Purchaser exercises investment discretion, constitutes "beneficial
ownership," as such term is used in Section 3 of the Investment Company Act
of 1940, as amended (the "1940 Act"), by only one person. In making the
representation contained in this paragraph, the Purchaser has taken into
account the attribution rules prescribed in subparagraph (A) of Section
3(c)(1) of the 1940 Act.
4. The Purchaser understands that there is no market for the Notes
and that no assurance can be given as to the liquidity of the trading market
for the Notes or that a trading market for the Notes will develop.
Accordingly, the Purchaser must be prepared to hold the Notes for an
indefinite period of time.
5. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has caused this document to
be executed by their duly authorized officers as of the date set forth below.
__________________________________ _________________________________
Seller Purchaser
By:_______________________________ By: _____________________________
Name: Name:
Title: Title:
Taxpayer ID: Taxpayer ID:
Date: Date:
EXHIBIT 2
FORM OF NOTE ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
without representation or warranty, express or implied, and without recourse
unto
- ---------------------------------------------------------------------------
Please insert Social Security or
Taxpayer Identification Number of Transferee
----------------------------
/---------------------------/
- -----------------------------------------------------------------------------
(Please print or typewrite name and address, including zip code of
transferee)
- -----------------------------------------------------------------------------
the within 6.63% Secured Note, Due February 5, 2017 and all rights
thereunder, and hereby irrevocably constitutes and appoints
- -----------------------------------------------------------------------------
attorney to register the transfer of such Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: ______________
Signature Guaranteed:
- ------------------------------- --------------------------------
NOTICE: Signature(s) must NOTICE: The signature above
be guaranteed by a member must correspond with the name
or participant of a of the Registered Owner
signature guarantee program. of this Note.
State of ________________ )
) ss.
County of ______________ )
The foregoing instrument was acknowledged before me this _____ day
of ______________, by __________________________ , of ___________________, a
________________, who is personally known to me or has produced his or her
driver's license as identification.
____________________________________________
Notary Public
Print Name _________________________________
My Commission Expires: _____________________
Commission No.: ____________________________
State of __________________ )
) ss.
County of _________________ )
On this, the ___ day of ___________, ____, before me, a Notary
Public, personally appeared ____________________, who acknowledged himself to
be _________________, of __________________, a ______________________and that
he, as such _____________, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing his name as trustee.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
___________________________________
Notary Public
My commission expires:_____________
EXHIBIT 3
FORM OF NOTICE TO TRUSTEE
Manufacturers and Traders
Trust Company
One M&T Plaza, 7th Floor
Buffalo, New York 14203-2399
Re: Agree Facility No. I, L.L.C. 6.63% Secured Notes Due February 5, 2017
Dear Sir/Madam:
Reference is hereby made to the Trust Mortgage, dated as of June __,
1999 (the "Indenture") from Agree Facility No. I, L.L.C.("Owner") to
Manufacturers and Traders Trust Company, as trustee ("Trustee"). Capitalized
terms used herein which are undefined shall have the meanings assigned to
such terms in the Indenture.
The undersigned Registered Owner hereby confirms to Trustee that it
has approved the attached Performance Bond obtained by Owner pursuant to the
Indenture.
[_________________________]
By:_______________________
Name:
Title:
EXHIBIT 4
TRUSTEE FEE SCHEDULE
1. $2500 initiation fee due at Closing (as defined in the Note Agreement)
2. $2500 annual fee payable in advance, the first such annual fee being
due at Closing.
EXHIBIT 5 TO TRUST MORTGAGE
OMITTED
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT made this 1st day of July, 1999,
by and between AGREE REALTY CORPORATION, a Maryland corporation (the
"Company"), and RICHARD AGREE (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is expected to make certain
contributions to the financial strength of the Company;
WHEREAS, the Company desires to assure itself of the
continuity of management and desires to establish certain compensation rights
of certain of its key senior executive officers, including the Executive; and
WHEREAS, the Company desires to employ the Executive and the
Executive desires to accept such employment on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter contained, the parties hereto hereby agree as follows:
1. Employment; Term. The Company hereby employs the Executive
as Chairman of the Board of Directors and President of the Company and the
Executive agrees to serve the Company in such capacity for the period
commencing the date hereof (the "Effective Date") and ending on the fifth
anniversary of the Effective Date (the "Initial Term").
2. Termination. Subject to the terms and conditions set forth
herein, the Executive's employment may be terminated by either party hereto
upon thirty (30) days' written notice to the other party hereto.
3. Duties. The Executive shall be responsible for the
supervision, control and conduct of all the business and affairs of the
Company and shall have such additional duties and any additional
responsibilities as are normally assigned to a Chief Executive Officer and
President which may from time to time be reasonably designated by the Board
of Directors of the Company (the "Board"), provided that in no event shall
the scope of his duties and the extent of his responsibilities be
substantially different from the duties and responsibilities usually
associated with those positions in a corporation similar in size and function
to the Company. At all times, the Executive shall be subject to the direction
of the Board. During the period the Executive is employed by the Company (the
"Employment Period"), the Executive shall devote his full business time and
best efforts to the business and affairs of the Company and its subsidiaries,
except for any business activities rendered by the Executive in connection
with the partnerships listed on Schedule A.
4. Compensation. The Company shall pay the Executive a salary
at the rate of one hundred fifty thousand dollars ($150,000.00) per annum
during the Employment Period, subject to the last sentence of this Section 4.
Such compensation shall be shall be payable in accordance with the usual
payroll practices of the Company, as compensation to the Executive for the
services rendered by the Executive hereunder, including, but not limited to,
all services rendered by the Executive as an officer or director of the
Company and its subsidiaries. the Board shall review the Executive's salary
immediately prior to the end of each fiscal year during the Employment Period
to determine whether the Executive's salary shall be increased based on such
criteria as the Board or any committee thereof shall from time to time
establish (for purposes of this Employment Agreement, the term "salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 4).
5. Benefits.
The Company agrees to reimburse the Executive for all reasonable and
necessary travel, business entertainment and other business expenses incurred
by the Executive in connection with the performance of his duties under this
Employment Agreement. Such reimbursements shall be made by the Company on a
timely basis upon submission by the Executive of vouchers, in accordance with
the Company's standard procedures. All such reimbursements shall be subject
to limitations, which may from time to time be prescribed by the Board.
(b) The Executive shall be entitled to participate in any and all
life insurance , medical insurance group health, disability insurance, and
other benefit plans which are made generally available during the Employment
Period by the Company to executives of the Company, including, but not
limited to, the Company's Stock Incentive Plan, Profit Sharing Plan and
performance Bonus Plan (to the extent that the Executive qualifies under the
eligibility provisions of such plan or plans). Additionally, the Executive
shall be entitled to receive annual paid vacation and paid holidays made
available pursuant to Company policy to all of the senior executives of the
Company.
(c) In the event of the death or disability of the Executive, the
Executive's employment hereunder shall terminate and in addition to any
amounts payable at such time and in accordance with the terms of Paragraph 4
hereof (appropriately pro-rated), the Company shall, for the longer of (i)
the remainder of the calendar year in which the Executive dies or becomes
disabled or (ii) six (6) months, but in no event longer than the remainder of
the Initial Term, pay to the Executive or the Executive's personal
representative, as the case may be, the Executive's salary at the date of
such death or disability. For the purposes hereof, the term "disability"
shall mean the absence of the Executive, due to physical or mental illness,
or a full time basis for one hundred twenty (120) consecutive business days
or for shorter periods which aggregate more than four months during any
consecutive twelve (12) month period.
(d) In the event the employment of the Executive is terminated by
the Company for any reason other than for cause (as defined below), the
Executive shall be entitled to all amounts payable during the Initial Term
(including, but not limited to, salary at the then applicable rate) within
ten (10) days of such termination and the Executive shall have the right to
continue to participate in all benefits plans made generally available by the
Company to its executives during the Initial Term. For purposes of this
Section 5(d) the term "cause" shall mean: (i) the Executive's willful failure
or refusal to perform specific reasonable written directives of the Board,
which directives are consistent with the scope and nature of the Executive's
duties and responsibilities under this Employment Agreement, and which are
not remedied by the Executive within sixty (60) days after being notified, in
writing, of his failure by the Board; (ii) the Executive's conviction of a
felony; (iii) any act of dishonesty involving the Company which results in an
unjust gain or enrichment to the Executive at the expense of the Company;
(iv) any act involving moral turpitude of the Executive which adversely
affects the business of the Company; or (v) a material breach by the
Executive of his obligations under Section 7 hereof.
(e) In the event this Employment Agreement is terminated by the
Company for "cause," the Executive shall forfeit his right to any and all
benefits (other than any previously vested benefits, including, without
limitation, the Executive's salary through the date of termination) which the
Executive would otherwise have been entitled to receive pursuant to the terms
of this Employment Agreement.
6. Change in Control of the Company If a Change in Control (as
hereinafter defined) of the Company occurs prior to the scheduled expiration
of the Term and within three years after the Change in Control of the Company
Executive is terminated by the Company for reasons other than death,
Disability, or Cause the Company or any successor thereto, within 30 days of
Executive's termination of employment, will pay to Executive, an amount equal
to the greater of (i) 3 times Executive's compensation, or (ii) the
Executive's compensation due over the Initial Term of this agreement which,
for purposes of this Section, Executive Compensation shall mean an amount
equal to the highest annualized rate of Executive's Salary prior to the date
of termination.
For purposes of this Agreement, a "Change in Control" shall have occurred if
at any time during the Term any of the following events occurs:
(a) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person and as a result of such
merger, consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders
of Voting Stock (as hereinafter defined) of the Company immediately prior to
such transaction;
(b) The Company sells all or substantially all of its assets to
any other corporation or other legal person, less than a majority of the
combined voting power of the then-outstanding voting securities of which are
held in the aggregate by the holders of Voting Stock of the Company
immediately prior to such sale;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing
that any person (as the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 25%
or more of the combined voting power of the then-outstanding securities of
the Company entitled to vote generally in the election of directors of the
Company ("Voting Stock").
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has or may
have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(e) If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors of the
Company cease for any reason to constitute at least a majority thereof unless
the election, or the nomination for election by the Company's stockholders,
of each director of the Company first elected during such period was approved
by a vote of at least two-thirds of the directors of the Company then still
in office who were directors of the Company at the beginning of any such
period.
Notwithstanding the foregoing provision of Section 6(c) or 6(d) hereof, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Agreement solely because the Company, an entity in which the Company directly
or indirectly beneficially owns 50% or more of the voting securities of such
entity, any Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of voting securities of the Company, whether in
excess of 25% or otherwise, or because the Company, reports that a change in
control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership.
7. Non-Competition. The Executive agrees that (a) at all times
during the Initial Term, if the Executive is terminated for "cause" or
voluntarily terminates his employment hereunder and (b) at all times during
the Employment Period, the Executive shall not engage in any business which
is competitive with the then current business of the Company or any of its
subsidiaries. For the purposes of this Paragraph a business shall be deemed
competitive if it consists of or includes any type or line of business
engaged in by the Company or any of its subsidiaries at the time of such
terminations and which is conducted in whole or in part, within those states
where the Company then conducts business. The executive shall be deemed,
directly or indirectly, to engage in a business if he participates in such
business as a director, officer, stockholder, employee, salesman, partner or
individual proprietor, or if he participates in such business as an investor
who has made advances on loan, contributions to capital or expenditures for
the purchase of stock, permits his name to be used by, acts as a paid
consultant or paid advisor to, or if the Executive exerts a controlling
influence over such business, provided that nothing herein contained shall be
deemed to preclude the purchase of securities of publicly owned companies
which securities are listed on a national securities exchange, but the total
holding of any such securities so listed shall be limited to five percent
(5%) of the amount of such securities outstanding.
8. Confidentiality. The Executive shall not at any time use or
divulge, furnish or make accessible to anyone (other then in the regular
course of the business of the Company or any of its subsidiaries) any
knowledge or information of trade secrets and proprietary information which
has not otherwise become publicly available (including, but not limited to,
any information concerning customers or accounts) with respect to the
business affairs of the Company or any of its subsidiaries.
9. Notices. All notices relating to this Employment Agreement
shall be in writing and shall be deemed to have been given at the time when
delivered personally or sent in the United States by registered or certified
mail, return receipt requested, in a postpaid envelope, addressed to the
other party at the address set forth below, or to such changed address as the
other party may have fixed by notice; provided, however, that any notice of
change of address shall be effective only upon receipt:
To the Company Agree Realty Corporation
31850 Northwestern Highway
Farmington Hills, MI 48334
To the Executive 2455 Wendrick Court
West Bloomfield, MI 48322
10. Assignability, Binding Effect and Survival. This Employment
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, including without limitation any corporation which
may acquire all or substantially all of the Company's assets and business or
with or into which the Company may be consolidated or merged, and shall inure
to the benefit of and be binding upon the Executive, his heirs, executors,
administrators and legal representatives, provided that the obligations of
the Executive hereunder may not be delegated.
11. Complete Understanding; Amendment; Waiver. This Employment
Agreement constitutes the complete understanding between the parties with
respect to the employment of the Executive hereunder, and no statement,
representation, warranty or covenant has been made by either party with
respect thereto except as expressly set forth herein. this Employment
Agreement shall not be altered, modified, amended or terminated except by
written instrument signed by each of the parties hereto. Waiver by either
party hereto of any breach hereunder by the other party shall not operate as
a waiver of any other breach, whether similar to or different from the breach
waived. No delay on the part of the Company or the Executive in the exercise
of any of their respective rights or remedies shall operate as a waiver
thereof, and no single or partial exercise by the Company or the Executive of
any such right or remedy shall preclude other or further exercise thereof.
12. Severability. If any provision of this Employment Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Employment Agreement or
the application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not
be affected thereby, and each provision hereof shall be enforced to the
fullest extent permitted by law.
13. Governing Law. This Employment Agreement shall be governed and
construed in accordance with the internal laws of the State of Michigan
without regard to conflict of laws provisions.
14. Indemnification. The Company shall indemnify the Executive
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred, in any action or
proceeding to which the Executive is made a party by reason of the fact that
he is or was an officer or director of the Company, to the fullest extent
permitted by law, the By-laws of the Company and the Articles of
Incorporation of the Company.
15. Counterparts. This Employment Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all parties hereto.
16. Titles and Captions. All paragraph, article or section titles or
captions in this Employment Agreement are for convenience only and in no way
define, limit, extend or describe the scope or intent of any provisions
hereof.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Employment Agreement as of the date first above written.
AGREE REALTY CORPORATION
By: /s/ Richard Agree
---------------------
Name: Richard Agree
Title: President
/s/ Richard Agree
-------------------------------
Richard Agree
Schedule A
--------------------------
Anderson Plaza
Angola Plaza
Brentwood Realty Associates
Floyd Realty Associates
Gas City Plaza
Grant Line Plaza
Greenwood Realty Associates
Harden Realty Associates
Hartman Realty Associates
Main Realty Associates
Marshall Plaza
Parkway Plaza Limited Partnership
Shiloh Plaza
Southwood Realty Associates
Warrick Associates
West Frankfort Plaza
T.M.J. Incorporated
Radcliff, Inc.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT made this 1st day of July, 1999,
by and between AGREE REALTY CORPORATION, a Maryland corporation (the
"Company"), and KENNETH R. HOWE (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is expected to make certain
contributions to the financial strength of the Company;
WHEREAS, the Company desires to assure itself of the
continuity of management and desires to establish certain compensation rights
of certain of its key senior executive officers, including the Executive; and
WHEREAS, the Company desires to employ the Executive and
the Executive desires to accept such employment on the terms and conditions
hereinafter set forth. NOW, THEREFORE, in consideration of the mutual
covenants hereinafter contained, the parties hereto hereby agree as follows:
1. Employment; Term. The Company hereby employs the Executive
as Vice President, Finance and Secretary of the Company and the Executive
agrees to serve the Company in such capacity for the period commencing the
date hereof (the "Effective Date") and ending on the fifth anniversary of the
Effective Date (the "Initial Term").
2. Termination. Subject to the terms and conditions set forth
herein, the Executive's employment may be terminated by either party hereto
upon thirty (30) days' written notice to the other party hereto.
3. Duties. The Executive shall be responsible for the
supervision, control and conduct of all the business and affairs of the
Company and shall have such additional duties and any additional
responsibilities as are normally assigned to a Chief Financial Officer, Vice
President and Secretary which may from time to time be reasonably designated
by the Board of Directors of the Company (the "Board"), provided that in no
event shall the scope of his duties and the extent of his responsibilities be
substantially different from the duties and responsibilities usually
associated with those positions in a corporation similar in size and function
to the Company. At all times, the Executive shall be subject to the direction
of the Board. During the period the Executive is employed by the Company (the
"Employment Period"), the Executive shall devote his full business time and
best efforts to the business and affairs of the Company and its subsidiaries,
except for any business activities rendered by the Executive in connection
with the partnerships listed on Schedule A.
4. Compensation. The Company shall pay the Executive a salary
at the rate of one hundred thousand dollars ($100,000.00) per annum during
the Employment Period, subject to the last sentence of this Section 4. Such
compensation shall be shall be payable in accordance with the usual payroll
practices of the Company, as compensation to the Executive for the services
rendered by the Executive hereunder, including, but not limited to, all
services rendered by the Executive as an officer or director of the Company
and its subsidiaries. the Board shall review the Executive's salary
immediately prior to the end of each fiscal year during the Employment Period
to determine whether the Executive's salary shall be increased based on such
criteria as the Board or any committee thereof shall from time to time
establish (for purposes of this Employment Agreement, the term "salary" shall
mean the amount established and adjusted from time to time pursuant to this
Section 4).
5. Benefits.
The Company agrees to reimburse the Executive for all reasonable and
necessary travel, business entertainment and other business expenses incurred
by the Executive in connection with the performance of his duties under this
Employment Agreement. Such reimbursements shall be made by the Company on a
timely basis upon submission by the Executive of vouchers, in accordance with
the Company's standard procedures. All such reimbursements shall be subject
to limitations, which may from time to time be prescribed by the Board.
(b) The Executive shall be entitled to participate in any and
all life insurance , medical insurance group health, disability insurance,
and other benefit plans which are made generally available during the
Employment Period by the Company to executives of the Company, including, but
not limited to, the Company's Stock Incentive Plan, Profit Sharing Plan and
performance Bonus Plan (to the extent that the Executive qualifies under the
eligibility provisions of such plan or plans). Additionally, the Executive
shall be entitled to receive annual paid vacation and paid holidays made
available pursuant to Company policy to all of the senior executives of the
Company.
(c) In the event of the death or disability of the Executive,
the Executive's employment hereunder shall terminate and in addition to any
amounts payable at such time and in accordance with the terms of Paragraph 4
hereof (appropriately pro-rated), the Company shall, for the longer of (i)
the remainder of the calendar year in which the Executive dies or becomes
disabled or (ii) six (6) months, but in no event longer than the remainder of
the Initial Term, pay to the Executive or the Executive's personal
representative, as the case may be, the Executive's salary at the date of
such death or disability. For the purposes hereof, the term "disability"
shall mean the absence of the Executive, due to physical or mental illness,
or a full time basis for one hundred twenty (120) consecutive business days
or for shorter periods which aggregate more than four months during any
consecutive twelve (12) month period.
(d) In the event the employment of the Executive is terminated by
the Company for any reason other than for cause (as defined below), the
Executive shall be entitled to all amounts payable during the Initial Term
(including, but not limited to, salary at the then applicable rate) within
ten (10) days of such termination and the Executive shall have the right to
continue to participate in all benefits plans made generally available by the
Company to its executives during the Initial Term. For purposes of this
Section 5(d) the term "cause" shall mean: (i) the Executive's willful failure
or refusal to perform specific reasonable written directives of the Board,
which directives are consistent with the scope and nature of the Executive's
duties and responsibilities under this Employment Agreement, and which are
not remedied by the Executive within sixty (60) days after being notified, in
writing, of his failure by the Board; (ii) the Executive's conviction of a
felony; (iii) any act of dishonesty involving the Company which results in an
unjust gain or enrichment to the Executive at the expense of the Company;
(iv) any act involving moral turpitude of the Executive which adversely
affects the business of the Company; or (v) a material breach by the
Executive of his obligations under Section 7 hereof.
(e) In the event this Employment Agreement is terminated by the
Company for "cause," the Executive shall forfeit his right to any and all
benefits (other than any previously vested benefits, including, without
limitation, the Executive's salary through the date of termination) which the
Executive would otherwise have been entitled to receive pursuant to the terms
of this Employment Agreement.
6. Change in Control of the Company
If a Change in Control (as hereinafter defined) of the Company occurs prior
to the scheduled expiration of the Term and within three years after the
Change in Control of the Company Executive is terminated by the Company for
reasons other than death, Disability, or Cause the Company or any successor
thereto, within 30 days of Executive's termination of employment, will pay to
Executive, an amount equal to the greater of (i) 3 times Executive's
compensation, or (ii) the Executive's compensation due over the Initial Term
of this agreement which, for purposes of this Section, Executive Compensation
shall mean an amount equal to the highest annualized rate of Executive's
Salary prior to the date of termination.
For purposes of this Agreement, a "Change in Control" shall have occurred if
at any time during the Term any of the following events occurs:
(a) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person and as a result of such merger,
consolidation or reorganization less than a majority of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders
of Voting Stock (as hereinafter defined) of the Company immediately prior to
such transaction;
(b) The Company sells all or substantially all of its assets to
any other corporation or other legal person, less than a majority of the
combined voting power of the then-outstanding voting securities of which are
held in the aggregate by the holders of Voting Stock of the Company
immediately prior to such sale;
(c) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), disclosing
that any person (as the term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 25%
or more of the combined voting power of the then-outstanding securities of
the Company entitled to vote generally in the election of directors of the
Company ("Voting Stock").
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Company has or may
have occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
(e) If during any period of two consecutive years, individuals who
at the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of
each director of the Company first elected during such period was approved by
a vote of at least two-thirds of the directors of the Company then still in
office who were directors of the Company at the beginning of any such period.
Notwithstanding the foregoing provision of Section 6(c) or 6(d) hereof, a
"Change in Control" shall not be deemed to have occurred for purposes of this
Agreement solely because the Company, an entity in which the Company directly
or indirectly beneficially owns 50% or more of the voting securities of such
entity, any Company-sponsored employee stock ownership plan or any other
employee benefit plan of the Company either files or becomes obligated to
file a report or a proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) under the Exchange Act, disclosing beneficial
ownership by it of shares of voting securities of the Company, whether in
excess of 25% or otherwise, or because the Company, reports that a change in
control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership.
7. Non-Competition. The Executive agrees that (a) at all times
during the Initial Term, if the Executive is terminated for "cause" or
voluntarily terminates his employment hereunder and (b) at all times during
the Employment Period, the Executive shall not engage in any business which
is competitive with the then current business of the Company or any of its
subsidiaries. For the purposes of this Paragraph a business shall be deemed
competitive if it consists of or includes any type or line of business
engaged in by the Company or any of its subsidiaries at the time of such
terminations and which is conducted in whole or in part, within those states
where the Company then conducts business. The executive shall be deemed,
directly or indirectly, to engage in a business if he participates in such
business as a director, officer, stockholder, employee, salesman, partner or
individual proprietor, or if he participates in such business as an investor
who has made advances on loan, contributions to capital or expenditures for
the purchase of stock, permits his name to be used by, acts as a paid
consultant or paid advisor to, or if the Executive exerts a controlling
influence over such business, provided that nothing herein contained shall be
deemed to preclude the purchase of securities of publicly owned companies
which securities are listed on a national securities exchange, but the total
holding of any such securities so listed shall be limited to five percent
(5%) of the amount of such securities outstanding.
8. Confidentiality. The Executive shall not at any time use or
divulge, furnish or make accessible to anyone (other then in the regular
course of the business of the Company or any of its subsidiaries) any
knowledge or information of trade secrets and proprietary information which
has not otherwise become publicly available (including, but not limited to,
any information concerning customers or accounts) with respect to the
business affairs of the Company or any of its subsidiaries.
9. Notices. All notices relating to this Employment Agreement
shall be in writing and shall be deemed to have been given at the time when
delivered personally or sent in the United States by registered or certified
mail, return receipt requested, in a postpaid envelope, addressed to the
other party at the address set forth below, or to such changed address as the
other party may have fixed by notice; provided, however, that any notice of
change of address shall be effective only upon receipt:
To the Company Agree Realty Corporation
31850 Northwestern Highway
Farmington Hills, MI 48334
To the Executive 47378 Tilch
Macomb Township, MI 48044
10. Assignability, Binding Effect and Survival. This Employment
Agreement shall inure to the benefit of and be binding upon the Company, its
successors and assigns, including without limitation any corporation which
may acquire all or substantially all of the Company's assets and business or
with or into which the Company may be consolidated or merged, and shall inure
to the benefit of and be binding upon the Executive, his heirs, executors,
administrators and legal representatives, provided that the obligations of
the Executive hereunder may not be delegated.
11. Complete Understanding; Amendment; Waiver. This Employment
Agreement constitutes the complete understanding between the parties with
respect to the employment of the Executive hereunder, and no statement,
representation, warranty or covenant has been made by either party with
respect thereto except as expressly set forth herein. this Employment
Agreement shall not be altered, modified, amended or terminated except by
written instrument signed by each of the parties hereto. Waiver by either
party hereto of any breach hereunder by the other party shall not operate as
a waiver of any other breach, whether similar to or different from the breach
waived. No delay on the part of the Company or the Executive in the exercise
of any of their respective rights or remedies shall operate as a waiver
thereof, and no single or partial exercise by the Company or the Executive of
any such right or remedy shall preclude other or further exercise thereof.
12. Severability. If any provision of this Employment Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Employment Agreement or
the application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not
be affected thereby, and each provision hereof shall be enforced to the
fullest extent permitted by law.
13. Governing Law. This Employment Agreement shall be governed and
construed in accordance with the internal laws of the State of Michigan
without regard to conflict of laws provisions.
14. Indemnification. The Company shall indemnify the Executive
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees actually and necessarily incurred, in any action or
proceeding to which the Executive is made a party by reason of the fact that
he is or was an officer or director of the Company, to the fullest extent
permitted by law, the By-laws of the Company and the Articles of
Incorporation of the Company.
15. Counterparts. This Employment Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all parties hereto.
16. Titles and Captions. All paragraph, article or section titles
or captions in this Employment Agreement are for convenience only and in no
way define, limit, extend or describe the scope or intent of any provisions
hereof.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
this Employment Agreement as of the date first above written.
AGREE REALTY CORPORATION
By: /s/ Richard Agree
---------------------
Richard Agree
President
/s/ Kenneth R. Howe
----------------------------
Kenneth R. Howe
Vice President, Finance
and Secretary
Schedule A
---------
Anderson Plaza
Angola Plaza
Brentwood Realty Associates
Floyd Realty Associates
Gas City Plaza
Grant Line Plaza
Greenwood Realty Associates
Harden Realty Associates
Hartman Realty Associates
Main Realty Associates
Marshall Plaza
Parkway Plaza Limited Partnership
Shiloh Plaza
Southwood Realty Associates
Warrick Associates
West Frankfort Plaza
T.M.J. Incorporated
Radcliff, Inc.
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